2009 Chapter 11 Recent Developments (Part I)

between the confirmation of the Plan and the commencement of the 2006 Bankruptcy. And, lastly, the bankruptcy court allowed interest from the beginning of the 2006 Bankruptcy. The district court reversed on one point and said that the FCC was due interest for the period between the 1999 Bankruptcy and confirmation of the Plan based on § 506(b).

Issues: The only remaining issues on appeal is whether the district court erred to "[(1)] the extent it awarded implicit interest for the period from November 15, 2000 [the Plan confirmation date] to May 8, 2006 and [(2)] § 506(b) interest for the period from July 28, 1999 to November 15, 2000."

Rules:

(1)

In cramming down a plan on a secured creditor (here, the FCC), a plan must meet the remaining requirements of § 1129(a) (other than (a)(8)) and the plan must not discriminate and be fair and equitable to the interests that are not accepting the plan. In turn, fair and equitable means "(i) the creditor retains its liens and receives the present value of its allowed secured claims [which means that the creditor should be paid its principal plus interest]..." In other words, § 1129(b)(2)(A)(i)(II) requires that interest be paid if the secured creditor's claim is to be paid over time.

(2)

An oversecured creditor's right to interest is governed by § 506(b), which says that interest is considered an additional part of the secured creditor's claim.

Holding: Affirmed.

Reasoning:

(1)

Here, although there was uncertainty as to the FCC's status at the time the Plan was confirmed, once the Supreme Court decided Next-Wave, it was clear that the FCC was a secured creditor and entitled to interest under the Plan. Therefore, since the bankruptcy court interpreted - as opposed to modified - the Plan, it is entitled to deference and the interest allowed after the Plan was confirmed up until the 2006 Bankruptcy is affirmed.

(2)

Because it is clear that the FCC was a secured creditor and that it was oversecured, it is entitled to interest under § 506(b). That the FCC did not ask for such interest until the 2006 Bankruptcy is not important here because of the specific terms of the Stipulation, which allowed the FCC to seek interest on the FCC POC.

Preston Trucking Co., Inc. v. Liquidity Solutions, Inc., et. al. (In re Preston Trucking Co., Inc.), 392

B.R. 623 (D. Md. 2008)

Facts: Liquidity Solutions, Inc. ("Liquidity") bought proofs of claim that were filed by the debtor's former employees for violations of the WARN Act and for violations of the collective bargaining agreement that existed under § 301 of the Labor Management Relations Act (the "LMRA"). The Teamsters National Freight Industry Negotiating Committee and a number of the Teamsters Local Unions affiliated with the International Brotherhood of Teamsters (collectively, the "Teamsters") argue that they own the claims that were bought by Liquidity since the Teamsters litigated the claims in the bankruptcy and thus, the employees had no right to assign them. Or to the extent the claims were assignable, the assignments were invalid.

Issues:

(1)

Whether the employees owned the claims - under both the WARN Act and the LMRA - they assigned to Liquidity.

(2)

Whether claims arising under the WARN Act are assignable.

(3)

Whether the specific assignments are valid.