Issue link: https://mbozikis.ufcontent.com/i/1422521
169 2. Non-Consensual Confirmation Although confirmation of a plan will be expedited if all classes of claims and interests have accepted the plan, 90 this is not a requirement. In fact, the Bankruptcy Code expressly provides for the situation where confirmation of a plan is sought over the rejection of the plan by one or more classes. Another situation in which plan confirmation can be complicated is where a debtor attempts to unimpair a secured creditor under a plan. Finally, an issue that typically must be resolved where confirmation of a plan is non-consensual is the debtor's value. Each of these issues is discussed in turn below. a. Cramdown If all of the requirements for consensual confirmation are satisfied except for acceptance of the plan by all impaired classes (see clause (viii) in Chapter VI.G.1. above), on request of the plan's proponent, the court shall confirm the plan notwithstanding the absence of this requirement, provided that the plan does not discriminate unfairly, and is fair and equitable, 91 with respect to each impaired class of claims and interests that has not accepted the plan. 11 U.S.C. § 1129(b)(1). This is commonly referred to as "cramdown." Section 1129 of the Bankruptcy Code states that a plan may not "discriminate unfairly . . . with respect to each class of claims or interests that is impaired under, and has not accepted, the plan." 11 U.S.C. § 1129(b)(1). "Generally speaking, this standard ensures that a dissenting class will receive relative value equal to the value given to all other similarly situated classes." In re Johns- Manville Corp., 68 B.R. 618, 636 (Bankr. S.D.N.Y. 1986). "The 90 The fact that all classes have accepted a Chapter 11 plan does not mean that there will be no objections to plan confirmation, however. Even if a class has accepted the plan, individual members of that class are not barred from objecting to plan confirmation. 91 The "fair and equitable" requirement is also commonly referred to as the "absolute priority rule" because it essentially requires that senior classes receive all distributions from the debtor before junior classes receive any distributions.