A bankruptcy judge in San Antonio disagreed with two bankruptcy judges in Houston by holding that a nonvoting class is equivalent to rejecting a plan in Subchapter V of chapter 11.
Bankruptcy judges continue to disagree on whether debts of corporations with cramdown plans in Subchapter V can have nondischargeable debts.
A creditor must control a class before its debt can become nondischargeable in Subchapter V.
Jan 2025
Although a ‘true-up’ cannot be imposed, a debtor could employ a ‘true-up’ to confirm an otherwise nonconfirmable plan.