Opinion ID: 741818
Heading Depth: 3
Heading Rank: 1

Heading: Liberty's Secured claim

Text: 13 The 11 U.S.C. § 1129(b)(2) cramdown provision specifies that a fair and equitable plan provide one of three alternatives for the holders of secured claims: 14 (i) (I) that the holders of such claims retain the liens securing such claims, whether the property subject to such liens is retained by the debtor or transferred to another entity, to the extent of the allowed amount of such claims; and 15 (II) that each holder of a claim of such class receive on account of such claim deferred cash payments totaling at least the allowed amount of such claim, of a value, as of the effective date of the plan, of at least the value of such holder's interest in the estate's interest in such property; 16 (ii) for the sale, subject to section 363(k) of this title, of any property that is subject to the liens securing such claims, free and clear of such liens, with such liens to attach to the proceeds of such sale, and the treatment of such liens on proceeds under clause (i) or (iii) of this subparagraph; or 17 (iii) for the realization by such holders of the indubitable equivalent of such claims. 18 11 U.S.C. § 1129(b)(2)(A). Each of these three alternatives prevents Ambanc from cramming down the Plan by paying Liberty less than the present value of the collateral securing its claim. 19 The Plan purports to employ the first alternative means of fair and equitable treatment, 11 U.S.C. § 1129(b)(A)(i)-deferred cash payments equal to the present value at the effective date. The value of Liberty's secured claim for the purposes of confirmation is the market value of real property plus the net amount of the rents collected post-petition and pre-confirmation and subject to a deed of trust and assignment of rents. Thus, Liberty should have been paid on its secured claim of approximately $4.6 million-$4.3 million in the value of the real property and the estimated $300,000 accumulated cash collateral by the time of the effective date. The bankruptcy court erred in finding the $4.3 million valuation of Liberty's secured claim satisfied the cramdown requirements.