(N.D. Ind. Feb. 4, 2015)
In this consolidated appeal of four single asset real estate chapter 11 cases, the district court affirms the bankruptcy court’s denial of the secured creditor’s motion for stay relief. The debtors had proposed plans that consolidated claims against the separate debtors into a single class of claims. The bankruptcy court held the plans were unconfirmable with such a provision, although it was an issue of first impression. The debtor then appealed, proposed new plans without the consolidation provision, then dismissed the appeal. The creditor sought stay relief under § 362(d)(3), arguing that the debtor had not proposed a plan with a reasonable possibility of being confirmed within the timeframe of § 362(d)(3). The court holds that the debtor satisfied the requirements and stay relief was appropriately denied. The first proposed plan had a reasonable possibility of being confirmed following appeal, and the debtors’ decision to file new plans outside the timeframe actually expedited the reorganization process. Opinion below.
Author: Matt Lindblom