IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
NORTH BAY CENTER, No. 95-10666
Memorandum of Decision
The court will deny confirmation of the debtor's plan for the following reasons:
1. The unsecured portion of the claim of creditor WHBA Real Estate Limited Partnership is
separately classified. This sort of separate classification is not permitted. In re Tucson Self
, 166 B.R. 892 (9th Cir.BAP 1994). Without this improper classification, there is
no assenting class of impaired non-insider claims as required by section 1129(a)(10) of the
2. The plan is not fair. The current equity interests are retained, despite the fact that they are
contributing nothing to the plan (or next to nothing, if the court counts their last-minute offer to
contribute $100,000.00). Since there are minimal unsecured creditors and minimal employees
involved, this is essentially a two-way dispute between the owners of the debtor and the principal
secured creditor. With no innocent third parties involved, it is unfair not to enforce the promise
the debtor made to pay its secured debt according to negotiated terms.
3. The plan is illusory and unfeasible. It calls for the payment in full of WHBA's large
deficiency claim by some unspecified time in the future, when the property has increased in
value. The debtor has not convinced the court that the property will ever increase in value, let
alone increase enough to pay WHBA's unsecured claim within any sort of reasonable time.
For the foregoing reasons, confirmation will be denied. Counsel for WHBA shall submit an
appropriate form of order.
Dated: March 4, 1996 _______________________