(Bankr. E.D. Ky. Aug. 3, 2015)
The bankruptcy court revisits the issue of the appropriate cramdown interest rate to apply in a Chapter 13 plan. The court holds that the “formula approach,” as set forth in the plurality opinion in Till, determines the correct rate. The debtor’s plan proposed to pay the secured creditor’s claim with interest at 5.25% (2% over the Wall Street Journal prime rate). The creditor argued that Till was not binding and that prior Sixth Circuit law provided the appropriate standard. The court provides a good discussion of the history of Till and its application in the Sixth Circuit and concludes that the “formula approach” is the correct standard. Opinion below.
Author: Matt Lindblom