Chapter 11 Reorganizations

ISBN-10
1520406444
ISBN-13
9781520406442
Pages
498
Language
English
Published
2017-01-24
Author
LandMark Publications

Description

THIS CASEBOOK contains a selection of U. S. Court of Appeals decisions that analyze and discuss issues surrounding Chapter 11 Reorganizations. The selection of decisions spans from 2014 to the date of publication.Before a bankruptcy court may confirm a reorganization plan in a Chapter 11 bankruptcy, it must determine if any of the persons voting to accept the plan are insiders. Insiders are either statutory or non-statutory. To be a "statutory insider," a creditor must fall within one of the categories listed in 11 U.S.C. � 101(31). A creditor does not become an insider simply by receiving a claim from a statutory insider. To be a non-statutory insider, the creditor must have a close relationship with the debtor and negotiate the relevant transaction at less than arm's length. In Re The Village at Lakeridge, LLC, 814 F. 3d 993 (9th Cir. 2016)."An insider is one who has a sufficiently close relationship with the debtor that his conduct is made subject to closer scrutiny than those dealing at arms [sic] length with the debtor." S.Rep. No. 95-989, at 25 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787, 5810; H.R.Rep. No. 95-595, at 312 (1977), as reprinted in 1978 U.S.C.C.A.N. 5963, 6269. We recognize two types of insiders: statutory insiders and non-statutory insiders. Statutory insiders, also known as "per se insiders," are persons explicitly described in 11 U.S.C. � 101(31), such as "person[s] in control of the debtor." � 101(31). As a matter of law, a statutory insider has a sufficiently close relationship with a debtor to warrant special treatment. In re Enter. Acquisition Partners, 319 B.R. at 631. No one suggests Rabkin qualifies as a statutory insider in his own right. In Re The Village at Lakeridge, LLC, ibid.A non-statutory insider is a person who is not explicitly listed in � 101(31), but who has a sufficiently close relationship with the debtor to fall within the definition. See Schubert v. Lucent Techs. Inc. (In re Winstar Commc'ns, Inc.), 554 F.3d 382, 395 (3d Cir.2009) ("[I]n light of Congress's use of the term 'includes' in � 101(31), courts have identified a category of creditors, sometimes called 'non-statutory insiders,' who fall within the definition but outside of any of the enumerated categories."); see also � 101(31) (stating that "[t]he term 'insider' includes" the listed categories (emphasis added)); � 102(3) (explaining that "includes" is "not limiting"). In Re The Village at Lakeridge, LLC, ibid.

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