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Hook Cattle & Farms, L.L.C., Ch. 12, BK17-40497 (Mar. 8, 2018)

The court denied confirmation of a Chapter 12 plan because the plan proposed to treat one partially secured creditor as fully secured, which unfairly discriminated against general unsecured creditors.

Deere & Company holds a fully secured claim and an unsecured claim. To settle Deere’s motion for relief, the debtor agreed, inter alia, to provide for full payment of the entire debt in the plan, and the court approved that stipulation. After the plan was filed, an unsecured creditor objected to confirmation. The court agreed with the objecting party that the treatment of Deere’s claim foundered on the four-part unfair-discrimination test. The court also clarified that approval of the parties’ stipulation simply approved the agreement between Deere and the debtor and did not excuse the debtor’s obligation to comply with § 1222.

Thursday, March 8, 2018