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chapter XII arrangement could be confirmed even though the only creditor objected.
Apparently in reaction to these cases the real estate industry proposed to the Senate Subcommittee a new subparagraph that became § 1129(a)(10).84 The industry's real concern was in having secured debt scaled down to the present value of the property, particularly during a depressed real estate cycle. Although this problem was largely remedied by the addition of § 1111(b), the industry also sought to prevent confirmation when the objecting secured creditor was the only class, a remedy essentially limited to single asset cases. No court has directly disputed the conclusion that the Congressional intent behind § 1129(a)(10) was merely to require "some indicia of creditor support for the debtor's schemes,"85 and yet as will be seen many courts also infer that there was an intent to give secured creditors with large deficiency claims an effective veto power by preventing satisfaction of this requirement.
In the single asset context, § 1129(a)(10) probably spawns more litigation than any other confirmation requirement. This is somewhat anomalous because the creditor who objects that § 1129(a)(10) has not been satisfied is complaining not on the basis of its own rights or objections, but that an insufficient number of other creditors failed to accept. For this reason one court described § 1129(a)(10) as a "technical requirement for confirmation," "not a substantive right of objecting creditors."86 That opinion also noted that the "purpose and usefulness of Section 1129(a)(10) have often been questioned,"87 that "the relationship between the intended result and the rule is uncertain at best," and that a "recent report by the prestigious National Bankruptcy Conference recommends its abolition."88
84
See In re Greystone III Joint Venture, 102 B.R. 560, 565-66 (Bankr. W.D. Tex. 1989), rev'd 948 F.2d 134 (5th Cir. 1991); In re Polytherm Industries Inc., 33 B.R. 823, 834 (W.D. Wis. 1983); In re Barrington Oaks General Partnership, 15 B.R. 952, 969-70, 8 BCD 569, 5 CBC 2d 969 (Bankr D. Utah 1981).
85
P. Murphy, CREDITOR'S RIGHTS IN BANKRUPTCY, Section 16.11, at 16-20 (1980), quoted in Polytherm, supra, 33 B.R. at 835 and Barrington Oaks, supra, 15 B.R. at 969. "This court cannot find any particular congressional intent, either expressed or implied in Congress' sausage-making exercise, that compels the court to read together the various Code provisions in such a way as to confer on secured creditors in cases such as these the veto power for which (the secured creditor) now lobbies." Greystone, supra, 102 B.R. at 566.
86
In re 7th Street & Beardsley Partnership, 181 B.R. 426 (Bankr. D. Az. 1994).
87
Citing Carlson, "The Classification Veto in Single-Asset Cases Under Bankruptcy Code Section 1129(a)(10)," 44 S.C. L. REV. 565 (1993). See also 1995 NORTON ANNUAL SURVEY OF BANKRUPTCY LAW.
88 REFORMING THE BANKRUPTCY CODE: THE NATIONAL CONFERENCE'S CODE REVIEW PROJECT,
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