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alternative plans, and § 1125(a)(1) specifically provides that a disclosure statement "need not include such information about any other possible or proposed plan." For a thorough critique of the Eighth Circuit's opinion on numerous grounds, see Judge Paine's excellent analysis in
Creekstone.242
Another criticism of Windsor's approach stems from a standing question: do other
creditors have grounds to complain that another creditor should not have been impaired?
One bankruptcy court, while not relying solely on a standing analysis, analyzed the
significance of 1129(a)(10) as follows:
Section 1129(a)(10) is a technical requirement for confirmation. It is an obligation for the proponent to fulfill; it is not a substantive right of objecting creditors. Indeed, the purpose and usefulness of Section 1129(a)(10) have often been questioned. See generally, David Gray Carlson, "The Classification Veto in Single-Asset Cases Under Bankruptcy Code Section 1129(a)(10)," 44 S.C. L. REV. 565 (1993). A recent report by the prestigious National Bankruptcy Conference recommends its abolition. REFORMING THE BANKRUPTCY CODE: THE NATIONAL BANKRUPTCY CONFERENCE'S CODE REVIEW PROJECT, FINAL REPORT, May 1, 1994, Proposal B-1, pp. 276-77. In this circuit, any change of a creditor's rights, whether for the better or worse, constitutes impairment and creates the possibility of a "consenting impaired class."243
The Ninth Circuit has held that impairment requires nothing more than altered rights even if the alteration enhances the rights. In L & J Anaheim,244 a secured creditor confirmed a liquidating plan in a single asset case using its own vote as the sole accepting impaired class.245 On appeal, the debtor argued that the secured creditor's position was actually improved under the plan, and that improvement could not be "impairment."
The Court reasoned that although at "first blush" improvement as impairment might
242
In re Creekstone Apartments Associates, 1995 Bankr. LEXIS 552 (Bankr. M.D. Tenn. 1995), affd, 1995 U.S. Dist. LEXIS 14876 (M.D. Tenn. 1995)..
243
In re Rhead, 179 B.R. 169 (Bankr. D. Az. 1995). 244 In re L & J Anaheim Associates, 995 F.2d 940, 943 (9th Cir. 1993).
245
The opinion does not suggest why the creditor did not instead draft a plan providing for restoration of all creditors' state law rights after the bankruptcy court auction of the debtor's property, thereby treating all classes of claims as unimpaired under § 1124(1), and thereby obviating the need for acceptance by any impaired class, since § 1129(a)(10) requires this only "if a class of claims is impaired under the plan." The Code is clear that voting, and acceptance by an impaired class, are not required if no class is impaired. In re Willow Creek Apts., Ltd., 1996 Bankr LEXIS 1888 (Bankr. M.D.
N.C. 1996).
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