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example, where he held a claim or interest in more than one class."172 This provision was deleted from the final bill on the rationale that § 105 would vest sufficient power in the court to designate exclusion of a vote due to conflict of interest.
Indeed, the Code itself expressly imposes unique voting rules for the limited purpose of satisfying § 1129(a)(10), and apparently does so on the basis that the holder of a claim may have conflicting interests. The vote of an insider who holds a claim does not count for the limited purpose of determining acceptance by an impaired class, even though that claim counts equally in the vote whether to invoke the absolute priority rule, and even though Congress rejected the Commission's proposal for automatic subordination of insiders' claims.173 Since the votes of insiders, who also have other interests at stake beyond their unsecured claims, are not allowed to affect the vote of that class, why is it so inappropriate to achieve the same result with respect to a creditor who holds a different but equally conflicting interest? The argument to the contrary is that the legal nature of the claim should control, not the motives of its holder.174
Judge Lundin's opinion in Aztec175 best articulated the creditors' relative interests rationale for separate classification of the deficiency claim. The court noted that the deficiency claimant "would have every incentive to vote its large deficiency claim to affect the treatment of its secured claim by defeating confirmation of any plan," if it were classified with other unsecured claims and therefore could preclude acceptance by an impaired class.176
Judge Lundin subsequently reiterated this rationale, after Greystone, to reach the same result in Creekside.177
172
H.R. Rep. 595, 95th Cong., 1st Sess., at 411, discussing proposed 11 U.S.C. § 1126(e).
173
See COMMISSION REPORT § 4-406(a)(2).
174
In re 500 Fifth Avenue Associates, 148 B.R. 1010 (S.D.N.Y. 1993)("That GECC's secured claim may drive the manner in which it casts its unsecured deficiency claim (and thus cause it to cast its unsecured vote in a manner that has nothing to do with its best interests as an unsecured creditor) is no reason to separately classify GECC's deficiency claim. Such a rationale improperly focuses on the motive and agenda of the claim holder rather than on the nature of the underlying claim.").
175
In re Aztec Co., 107 B.R. 585 (Bankr. M.D. Tenn. 1989)(Lundin, J.).
176
Id. at 587. The court also found the amount of new capital sufficient for the new capital exception under the U.S. Truck rationale, but found the disparate treatment of the classes to constitute unfair discrimination and denied confirmation on that ground. Id. at 588-92.
177
In re Creekside Landing, Ltd., 140 B.R. 713, 715 (Bankr. M.D. Tenn. 1992).
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