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rates are concerned.50 To the extent a rate change is an integral part of a plan, it must be approved by the appropriate regulatory bodies. As to the debtor's financial structure, however, the plan and the orders of the reorganization court are paramount. § 1142(a).
The provision has apparently not generated much controversy in the reported case law,51 although the bankruptcy court having jurisdiction of the Seabrook Nuclear Power Plant case noted that this provision raised several extremely complex questions for the court.52 Another court denied, for lack of sufficient evidence, a request for an emergency adjustment of rates, limiting itself to requesting the Interstate Commerce Commission to hear the request on an expedited basis, without reaching the question of the whether the bankruptcy court could have granted an emergency rate adjustment.53 Recently, the Ninth Circuit held that the "notwithstanding any otherwise applicable nonbankruptcy law" language of § 1123(a)(5) only preempted nonbankruptcy laws relating to financial condition.54
A condition of confirming any plan is that each holder of a claim receive as much as the holder would receive in the event of liquidation under Chapter 7. Section 1129(a)(7)(A) requires that each holder of a claim or interest either accept the plan or else receive or retain "property of a value, as of the effective date of the plan, that is not less than the amount that such holder would . . . receive or retain if the debtor were liquidated under chapter 7 . . . on such date." In more simple terms, the holder of the claim must receive the present value55 of the liquidation value of its claim. This is the "best interests of creditors" standard which is derived from the standard of confirmation under Chapters XI and XII of the Bankruptcy Act.
50
See also 28 U.S.C. § 959(b).
51
But see generally In re Cajun Elec. Power Coop, Inc., 185 F.3d 446 (5th Cir. 1999)
52
In re Public Service Co. of New Hampshire, 88 B.R. 521, 526 n.10 (Bankr. D.N.H. 1988) ("It has become abundantly clear to this court in the five months that have transpired in this proceeding that the deceptively simple and discrete words 'rates' and 'ratebase' , 'tariffs' and 'prudency' that govern the utility regulation world are clearly overlapping and conflicting with the words 'valuation' and claims determination' and 'sales of assets' and 'fair and equitable' that largely govern the bankruptcy reorganization world.").
53
In re Auto-Train Corporation, 6 B.R. 510 (Bankr. D.D.C. 1980).
54
Pacific Gas & Electric Co. v. California, 350 F.3d 932 (9th Cir. 2003).
55
One court incorrectly held that an oversecured creditor lacked standing to raise the best interests test, notwithstanding an argument that the interest rate on the deferred payment was below market, which would theoretically result in the present value of the payment being less than liquidation value. In re Patrician St. Joseph Partners Limited Partnership, 169 B.R. 669 (D. Az. 1994).
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