In re Barrington Oaks Gen. P'ship, 15 B.R. 952 (Bankr.D.Utah) In re Starcrest Props., Ltd.
PUBLISHED
The court held that chapter 11 debtor's sale of real property to a third party, in violation of a "due on sale" provision in its contract with secured creditor, altered creditor's interest in the property, and was thus an "impairment" under 11 U.S.C. § 1124, whether or not the due on sale provision was valid, because a change of obligors also changes the risk. There were two secured classes in debtor's plan, one was the objecting creditor, and the other was another lienholder on the property that had neither accepted nor rejected the plan. The court concluded that 11 U.S.C. § 1129(a)(10) requires at least one impaired class to affirmatively vote for the plan in order for the plan to be confirmed. Although the addition of 11 U.S.C. § 1126(f), which deems unimpaired classes to have accepted the plan, created some ambiguity, it did not undo the intent of § 1129(a)(10). Confirmation of debtor's plan was denied.