In re SLC Ltd. V, 137 B.R. 847 (Bankr.D.Utah)
PUBLISHED
Within a motion for relief from automatic stay, debtor and an under-secured creditor requested a ruling from the court on whether the new value exception to the absolute priority rule had survived adoption of the Bankruptcy Code of 1978. Circuit courts were split on the continued existence of the judicially created new value exception, as it had not been expressly incorporated into 11 U.S.C. § 1129(b) of the new bankruptcy code, and the U.S. Supreme Court had declined to rule on its continued vitality in Nw. Bank Worthington v. Ahlers, 485 U.S. 197 (1988). Determining that the statutory language did not plainly exclude or eliminate the new value exception, and considering the general presumption that, by enacting a statute, Congress did not intend to alter an existing judicially created concept of law, unless it specifically manifests such an intent, the court concluded that the new value exception had survived enactment of the Bankruptcy Code of 1978. However, due to both lack of evidence and the odd procedural posture of the case before it, the court considered the parties' request for a ruling, as to whether debtor could obtain confirmation of a plan based on the new value exception, to be premature.