Confirmation of debtor's proposed chapter 11 plan turned on whether it satisfied the new value exception to the absolute priority rule. Finding that the new contribution at issue did not satisfy the new value exception, the court denied confirmation of the plan, without deciding whether the exception remained viable after enactment of the 1978 Bankruptcy Code. Prior to the confirmation hearing, the court authorized debtor's former president, Holbrook, who owned approximately 35% of debtor's stock, to loan debtor $15,000 as an unsecured administrative claim under 11 U.S.C. § 503(b)(1). Debtor's plan, which was rejected by both the unsecured creditor class and debtor's equity interest holders, proposed to cancel all of its current stock and to provide Holbrook with more than 80% of its newly-issued stock, in repayment of his $15,000 administrative claim. The plan further provided that Holbrook would loan debtor up to $150,000 post-confirmation, which would be repaid over time, with interest, and would be secured by all of debtor's assets. The court found that, although the proposed Holbrook loan would be essential to the plan's feasibility, it could not be considered "new value" in support of the exception to the absolute priority rule, since the plan provided that the post-petition loan would be repaid in full, with interest. Therefore, the court considered whether Holbrook's $15,000 administrative claim was new value that was reasonably equivalent to his proposed post-confirmation equity interest in debtor. Analyzing Holbrook's administrative claim in light of the value of the senior rights being threatened, the court concluded that the present value of debtor's projected cumulative cash flow significantly exceeded Holbrook's $15,000 investment. In addition, none of the $15,000 contribution had been used to pay prepetition creditors, as it was all used prepetition to fund debtor's monthly operation. Finally, since the contribution had been obtained as an administrative expense, notice had not been required or given to all of debtor's creditors and equity holders, and those parties had no similar opportunity to participate in the future profits of the reorganized debtor. Based on its analysis of all of the facts, the court concluded that the proposed plan was not fair and equitable to the classes of claims that had not accepted it and, therefore, could not be confirmed under 11 U.S.C. § 1129(b).