Court Opinion

ID: 9700418
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:27:11.287437+00
Date Added: 2024-06-11T18:21:08.892719
License: Public Domain

ROSENTHAL, U.S. Bankruptcy Appellate Panel Judge,
concurring in the result.
I concur with the majority’s ruling that the confirmation order must be reversed as the plan provides an overly broad release. I, however, would hold that the debtor, who properly raised in its objection and preserved on appeal the issue of whether the plan violated that absolute priority rule codified in 11 U.S.C. § 1129(b)(2)(B), has standing to appeal that issue. I would adopt the analysis of Official Unsecured Creditors’ Committee v. Stern (In re SPM Mfg. Corp.), 984 F.2d 1305 (1st Cir.1993); In re MCorp. Fin., Inc., 160 B.R. 941 (S.D.Tex.1993); and In re Genesis Health Ventures, Inc., 266 B.R. 591 (Bankr.D.Del.2001), set forth in In re Armstrong World Industries, Inc., 320 B.R. 523 (D.Del.), aff'd, 432 F.3d 507 (3d Cir.2005). I agree with the Third Circuit’s statement that “these cases ... do not stand for the unconditional proposition that creditors are generally free to do whatever they wish with the bankruptcy proceeds they receive. Creditors must also be guided by the statutory prohibitions of the absolute priority rule, as codified in 11 U.S.C. § 1129(b)(2)(B).” Thus I would also reverse the confirmation order on the ground that the plan violated the absolute priority rule.