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allowed to match the sale price of any sale under a plan.331 Indefinite plan provisions for ultimate sale also do not fall within the § 1111(b) exception.332 One bankruptcy court decision extended this exception to deny a recourse claim to a nonrecourse secured creditor whose collateral was returned under a plan.333
The third cram down alternative is to provide the secured creditor the "indubitable equivalent" of its security. The phrase "indubitable equivalent" was adopted from Judge Learned Hand's opinion in Murel Holding.334 While it appears in the Code as a "catch-all alternative" cram down provision, it has also been read as "express[ing] threshold requirements applicable to" all cram down alternatives.335
Return of the collateral to the secured creditor is the simplest method of providing indubitable equivalent. Because the value of a secured claim is necessarily equal to (or less than) the value of the collateral securing the claim, return of the collateral necessarily provides the indubitable equivalent.336
After an initial misstep,337 the published Fifth Circuit decision in Sandy Ridge338
331 In re California Hancock, Inc., 88 B.R. 226 (9th Cir. BAP 1988); In re Woodridge North Apts., Ltd., 71 B.R. 189 (Bankr. N.D. Cal. 1987).
332 In re Western Real Estate Fund, Inc., 75 B.R. 580, 589 (Bankr. W.D. Ok. 1987)(even where plan calls for sale subject to § 363(k), the § 1111(b)(1)(A)(ii) exception does not apply when there is no specificity as to when the sale would occur within 10 years of confirmation).
333
In re Western Real Estate Fund, Inc., 109 B.R. 455 (Bankr. W.D. Okla. 1990). 334 In re Murel Holding Corporation, 75 F.2d 941 (2nd Cir. 1935).
335
In re Monnier Brothers, 755 F.2d 1336, 1339 (8th Cir. 1985). But see, In re Timbers of Inwood Forest Associates, Ltd., 793 F.2d 1380, 1401 (5th Cir. 1986)(rejecting American Mariner and holding the "indubitable equivalent" is merely an alternative), opinion reinstated in 808 F.2d 363 (1987), aff'd, 108 S. Ct. 626, 633 (1988); In re Metz, 67 B.R. 462, 15 B.C.D. 433, 436 (9th Cir. BAP 1986)(limiting the American Mariner argument to the "two specific applications" where "indubitable equivalent" appears in the Code, and suggesting it is not a threshold requirement but merely one of "three methods"), aff'd, 820 F.2d 1495, 1499 (9th Cir. 1987).
336
Matter of Sandy Ridge Development Corp., 881 F.2d 1346, 1350 (5th Cir. 1989). Accord, In re Coral Petroleum, Inc., 60 B.R. 377, 381 (Bankr. S.D. Tex. 1986). See In re FCX, Inc., 853 F.2d 1149 (4th Cir. 1988)(debtor can use § 1123(a)(5)(D) to return property notwithstanding nonbankruptcy law restrictions on such redemption of an agricultural cooperative's patronage dividend certificates); In re Elm Creek Joint Venture, 93 B.R. 105 (Bankr. W.D. Tex. 1988).
337
See In re B.W. Alpha, 89 B.R. 592, 597, n.4 (Bankr. N.D. Tex. 1988).
338
In re Sandy Ridge Development Corp., 881 F.2d 1346 (5th Cir. 1989).
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