Opinion ID: 468201
Heading Depth: 4
Heading Rank: 2

Heading: Cram Down

Text: 42 11 U.S.C. Sec. 1129(b) provides that if a plan meets all of the requirements for confirmation other than impairment, the court may confirm the plan if the plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired under, and has not accepted, the plan. 11 U.S.C. Sec. 1129(b)(1) (1982). Once again, Clinton contends that the Management Provisions violate these provisions. We find that this contention is without merit. 43 The terms does not discriminate unfairly and fair and equitable connote definite meanings within reorganization cases. Specifically, the concept of unfair discrimination applies to plans in which claims or interests have been subordinated. See Sponsors' Remarks, 124 Cong.Rec. H11, 104 (daily ed. Sept. 28, 1978) (statement of Rep. Edwards); 124 Cong.Rec. S17,420 (daily ed. Oct. 6, 1978) (statement of Sen. DeConcini). 18 The Collier treatise states that this provision requires that a plan allocate[ ] value to the class in a manner consistent with the treatment afforded to other classes with similar legal claims against the debtor. 5 Collier 15th, supra p 1129.03, at 1129-50. See also 3 Norton, supra Sec. 63.21, at 25. Similarly, the Code provides specific examples of when a plan is fair and equitable in the treatment of equity security holders. 11 U.S.C. Sec. 1129(b)(2)(B) (1982). See In re Toy & Sports Warehouse, Inc., 37 B.R. at 147-48; Klee, All You Ever Wanted to Know About Cram Down Under The New Bankruptcy Code, 53 Am.Bankr.L.J. 133, 148-56 (1979). 44 Here, Clinton does not argue that the Plan improperly treats subordinated claims or interests, or fails to satisfy the specific Code provisions on fair and equitable distributions. Rather, Clinton contends that the Management Provisions unfairly discriminate against his interest. We have already ruled that subsections (a)(6) and (a)(7) of Sec. 1123 require scrutiny of provisions in plans which alter voting and management of the Debtor. We have conducted that scrutiny, and have determined that the Management Provisions of the Plan under the facts of this case are appropriate and consistent with the interests of the equity security holders and public policy. We have also noted our disinclination to find redundancy in the Code. We do not believe that Sec. 1129(b)(1) also addresses provisions for management and voting of the Debtor. 19 Moreover, even if we were to construe the terms of unfair discrimination and fair and equitable broadly to require additional scrutiny of the Management Provisions, we would have no difficulty finding that the Plan does not unfairly discriminate against Clinton's equity security interest and that the Plan is fair and equitable, for the reasons previously discussed in this opinion.