| ID |
Name |
Group |
Other |
Code
Sec |
Cross
Ref |
Problem Referenced |
Proposed Solutions |
| NBRC-0129 |
M.O. Sigal, Jr. |
Attorney; Simpson, Thacher & Bartlett |
Invited Participant - July Meeting |
1122 |
|
Proposal to permit separate classification based on a
rational business judgment test exposes a dissenting member of an
accepting class (that was separately classified under the proposed
rational business justification and essentiality standard) but I think
that is justified under federal reorganization policy. |
Absent essentiality, believes the classification of
claims proposal would be justifiably subjec to attack on the grounds
that identical legal entitlements are voidable based on friendliness to
the debtor. I think an essentiality standard is necessary to justify
overriding otherwise existing equality of treatment. |
| NBRC-0178 |
Gary White, on behalf of the Natl. Assoc. of Credit
Management |
Chair, Government Affairs Comm., Natl. Assoc. of
Credit Management |
|
1121 |
|
Supports the working group's proposal regarding
claims classification. This proposal would allow all similarly
classified claims to be treated correspondingly. |
Supports the working group's proposal regarding
claims classification. |
| NBRC-0253 |
Barry E. Adler |
Professor, NYU School of Law |
|
1122 |
1129 |
Proposal amending § 1122 to provide that a
reorganization plan be permitted to separate claims of the same priority
into different classes if the proponent of the plan has a valid basiness
reason for such separation could invite unwanted strategic behavior on
the part of the debtor. |
In order to avoid potential strategic debtor
behavior, the author offers the follwoing supplemental proposal: also
amend § 1129(a)(10) so that it reads, in its entirety, "If a class
member is impaired under the plan, at least one class of claims that is
impaired under the plan has accepted the plan, determined without
including any acceptance of the plan by any insider, and determined as
if multiple classes of claims with the same priority, if any,
constituted a single class." |
| NBRC-0273 |
M.O. Sigal, Jr. |
Attorney |
|
1122 |
|
Chapter 11 Working Group's current consensus on
claims classifications would expose a dissenting member of an accepting
class (that was separately classified under the proposed rational
business justification and essesntiality standard), but this exposure is
justified under federal reorganization policy. Absent essentiality,
however, the claims classification proposal would be justifiably subject
to attack on the grounds that identical legal entitlements are voidable
based on friendliness to the debtor. |
An essentiality standard is necessary to justify
overriding otherwise existing equality of treatment. |
| NBRC-0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
|
|
The Commerical Law League of America believes that
the following issue should be considered by the NBRC: What should be the
rules for including claims together in the same class How much freedom
should the plan proponents have to make classification decisions Should
the requirement that at least one impaired class of creditors accept a
plan be amended |
The CLLA believes that these issues should receive
top priority (no additional details are provided). |
| NBRC-0318 |
Paul Mignini, Jr., Mary E. Wysocki and Charles M.
Tatelbaum |
President-National Association of Credit Management
("NACM"), Chair-NACM Government Affairs Committee, and NACM Legislative
and Bankruptcy Counsel, respectively |
|
546(c), 507(a)(1) |
|
NACM sought the input of all NACM members with
respect to proposed changes to the bankruptcy laws. The NACM Government
Affairs Committee, without discussing the rationales for their
suggestions, prepared the proposals below. |
NACM's Government Affairs Committee concludes that
§ 546 should be amended to provide that: any goods or services that
are provided or delivered to a debtor within ten days of the filing of a
bankruptcy petition shall be entitled to be treated as an administrative
priority claim under § 507(a)(1). |
| NBRC-0318 |
Paul Mignini, Jr., Mary E. Wysocki and Charles M.
Tatelbaum |
President-National Association of Credit Management
("NACM"), Chair-NACM Government Affairs Committee, and NACM Legislative
and Bankruptcy Counsel, respectively |
|
507(a) |
|
NACM sought the input of all NACM members with
respect to proposed changes to the bankruptcy laws. The NACM Government
Affairs Committee, without discussing the rationales for their
suggestions, prepared the proposals below. |
NACM's Government Affairs Committee concludes that
§ 507(a) should be amended to provide that: when credit is extended
to a debtor-in-possession under chapter 11, any unpaid obligation
incurred from the date of the petition until the date of the first
§ 341 meeting of creditors shall be entitled to a super priority
ahead of claims entitled to priority under § 507(a)(1). |
| NBRC-0320 |
Robert M. Zinman, on behalf of the Bankruptcy
Institute |
American Bankruptcy Institute ("ABI") |
Numerous position papers, memoranda and research
material |
|
|
None. |
Similar claims should be classified together unless
there is a real good reason for separate classification. Gerrymandering
should not be permitted. The Code shold probably still require the
acceptance of one impaired class (no additional details
provided). |
| NBRC-0384 |
American Bankruptcy Institute |
American Bankruptcy Institute ("ABI") |
|
|
|
ABI presents this "Report on the State of the
American Bankruptcy System," which is the capstone of ABI's three-year
Bankruptcy Reform Study Project. The Project's efforts culminated with a
65-question survey covering a broad spectrum of possible areas of
reform. The study indicates that: (1) in general, the Code of 1978 is
working well; and (2) probelms of delay, excessive costs, unfairness,
and abuse need to be addressed in the current round of
reforms. |
ABI recommnds: (1) strict deadlines for dismissal or
appointment of trustees to help combat abuse; (2) reorganization of
chapter 11 policy to provide stricter time limits, elimination of
non-viable debtors, and reduction of excessive professional fees; (3)
relaxing eligibility requirements for consumer reorganizations under
chapter 13, and providing time limits, limited discharge and uniform
national exemptions; (4) high standards of integrity for all
professionals; (5) a balance between creditors' and debtors' rights, and
equality of distribution; and (6) not adopting priority classes of
claimants. |
| NBRC-0386 |
National Association of Credit Management |
National Association of Credit Management
("NACM") |
|
|
|
In this statement entitled "Issues Involving
Governmental Agencies and Bankruptcy," the NACM expresses the following
conerns about government agencies in the bankruptcy process: the
expansion of priority status to government claims only serves to inhibit
and frustrate the ability of businesses to successfully
reorganize. |
Government claims should not be given expanded
status. |
| NBRC-0780 |
J. Christopher Kohn |
Director, Commercial Litigation Branch, U.S.
Department of Justice |
|
1122(a) |
|
"We oppose the Commission's proposals to codify a new
value exception to chapter 11 and to permit separate classification of
legally similar claims if supported by a 'rational business
justification.' The two proposals, working toether, erode sifnificantly
the absolute priority and creditor democracy structures of chapter 11."
"The Commission's classification proposal, which is closely intertwined
with the new value exception, is likewise seriously flawed. It invites
gerrymandering and greatly undermines section 1129(a)(10) of the
Bankrutpcy Code." |
"A clear rule on classification simplifies the
confirmation standards, prevents abusive classification and saves its
attendant costs." "Modifying section 1122(a) to require that claims of
the same rank be placed in the same class for voting purposes and
receive consideration of the same value is the better
course." |
| NBRC-0921 |
Dean S. Cooper and George Kielman |
Associate General Counsel and Assistant General
Counsel, respectively, of The Federal Home Loan Mortgage Corporation
("Freddie Mac") |
|
1129(a)(10) |
|
"We understand that the chapter 11 working group is
considering a proposal to abolish section 1129(a)(10), which requires as
a condition of plan confirmation at least one vote in favor of the plan
from an impaired class of claims." "If section 1129(a)(10) is
eliminated, ther would be a possibility of cramdown in every single
asset case even if none of the creditor classes supports the debtor's
plan of reorganization." |
"Freddie Mac strongly urges the Commission to retain
section 1129(a)(10)." |
| NBRC-0921 |
Dean S. Cooper and George Kielman |
Associate General Counsel and Assistant General
Counsel, respectively, of The Federal Home Loan Mortgage Corporation
("Freddie Mac") |
|
1129(a)(10) |
|
"The Working Group's discussion supporting the claims
classification proposal states that the proposal was intended to codify
the rule that separate classification of substantially similar claims is
not permissible unless a business rationale for separate classification
exists." "If the proposal as adopted by the Commission actually
accomplished this result, Freddie Mac would not have substantial
problems with it. However, we are concerned what the proposal, as
currently adopted by the Commission, does not achieve the intended
result." "By using the term 'legally similar' (instead of the current
'substantially similar'), the proposal infuses uncertainty into the Code
and guarantees, in our opinion, intense new litigation over the meaning
of this term." |
"We believe that the Commission can correct this
defect by modifying the terminology of the classification proposal to,
first, affirmatively state that 'substantially similar' claims shall be
classified together and, second, to provide the exception to the rule
when there is nevertheless a rational business reasonfor separate
classification, provided that the need to obtain an affirmative vote
under section 1129(a)(10) is not such a reason." |
| NBRC-0930 |
C. Daniel Motsinger |
Attorney, Krieg, Devault, Alexander &
Capehart |
Letter from Grant F. Shipley to C. Daniel Motsinger
dated July 10, 1997, attached as Appendix A. |
1129(a)(10) |
|
"There was substantial sentiment that, in light of
the Commission's current recommendations regarding classification and
the 'lifting' of exclusivity when a debtor seeks to cram-down a new
value plan, 11 U.S.C. §1129(a)(10) should be repealed for the
reasons set forth at page 2 of your July 8, 1997
memorandum." |
Repeal section 1129(a)(10). |
| NBRC-1047 |
George Kielman |
Assistant General Counsel, Freddie Mac |
|
|
|
Author is responding to request for Freddie Mac's
position on the possible elimination of section 1129(a)(10). |
"While we understand that elimination of section
1129(a)(10) may be of interest and useful to certain segments of the
bankruptcy bar, we strongly urge that section 1129(a)(10) be retained at
least insofar as it applies to single asset real estate
cases." |
