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Reconciling "Dirt-for-Debt" Plans with "Indubitable Equivalent" Standard
American Bankruptcy Institute Journal, Vol. XXVIII, No. 8
10/1/2009
The indubitable equivalent requirement for confirmation of a chapter 11 plan is found in § 1129(b)(2), and its satisfaction is a necessary prerequisite for the "fair and equitable" treatment of a particular secured creditor. The upshot of an indubitable equivalence finding is that a plan, even though it does not provide a secured creditor with full payment of its claim or with all of its collateral, does nevertheless provide that creditor with the value of its secured claim. Value, of course, is decisive in these circumstances.
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Reprinted with permission from the ABI Journal, Vol. XXVIII, No. 8, October 2009.
Ron C. Bingham II is a Member in the firm's Atlanta office and a member of the Creditors' Rights & Bankruptcy Service Group. He routinely advises national and regional commercial lenders and corporate clients regarding pre-bankruptcy, bankruptcy, receivership and litigation matters in federal and state courts throughout the country.
D. Cooper Robertson is an Associate in the firm's Louisville office where his practice includes commercial foreclosure work, representation of creditors in bankruptcy court, and defending lender liability claims.