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Help me understand the APR in a small biz CH 11 - unsecured class
General unsecured creditors rejected plan in small business case (10%
dividend to GUC). I have several impaired classes who voted in favor and so
can cram down. However, in layman's terms, what does it mean that the
"holder of any claim or interest that is junior to the claims of such class
will not receive or retain under the plan on account of such junior claim
or interest..."
This is a mom and pop shop (Inc.). Will mom and pop still own the debtor if
they do not provide the "new value" exception to the APR? Can they still
pay themselves insider compensation pursuant to the budget attached to the
Plan? Or, does this just mean that during the 5 year plan they cannot take
a distribution and then after the Plan is completed they own the Debtor
again?
I really don't get this. I am trying to understand what "receive or retain"
really means for the mom and pop running this Inc.
There is no equity in the business and if it liquidated, only a priority
unsecured creditor would be paid, and not even in full. GUC's would get
zero.
Holly Roark
Certified Bankruptcy Specialist*
*and Sports Lawyer*
holly@roarklawoffices.com **primary email address**
www.roarklawoffices.com
*Central District of California & District of Idaho* - Consumer Bankruptcy
Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067
T (310) 553-2600; F (310) 553-2601
*By State Bar of California Board of Legal Specialization
General unsecured creditors rejected plan in small business case (10% dividend to GUC). I have several impaired classes who voted in favor and so can cram down. However, in layman's terms, what does it mean that the "holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest..."This is a mom and pop shop (Inc.). Will mom and pop still own the debtor if they do not provide the "new value" exception to the APR? Can they still pay themselves insider compensation pursuant to the budget attached to the Plan? Or, does this just mean that during the 5 year plan they cannot take a distribution and then after the Plan is completed they own the Debtor again? I really don't get this. I am trying to understand what "receive or retain" really means for the mom and pop running this Inc.There is no equity in the business and if it liquidated, only a priority unsecured creditor would be paid, and not even in full. GUC's would get zero.Holly RoarkCertified Bankruptcy Specialist*and Sports Lawyer
holly@roarklawoffices.com**primary email address**
www.roarklawoffices.com
Central District of California & District of Idaho - Consumer Bankruptcy Attorney
1875 Century Park East, Suite 600 Los Angeles, CA 90067T (310) 553-2600; F (310) 553-2601
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