Menu    7 ABR 95 

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA

In re: ) Case No. J99-01111-DMD
  ) Chapter 11
KAKE TRIBAL CORPORATION, )
 ) 
Debtor.              )
 ) 
___________________________________ )  

ORDER DENYING CONFIRMATION OF PLAN

The debtor's third amended plan duly came before the court for hearing on March 21, 2001. David Bundy appeared on behalf of the debtor. Spencer Sneed appeared on behalf of the Unsecured Creditors Committee. Barbara Franklin appeared on behalf of the United States Trustee's Office. Michael Parise appeared on behalf of Key Bank National Association. Jon Dawson appeared on behalf of Arctic King Trading Corp. Fred Triem appeared on behalf of Class Action Plaintiffs-Creditors Hanson Class and Tagaban/Nauska Class. After hearing the arguments of counsel, and reviewing their briefs, IT IS ORDERED:

Confirmation of Kake Tribal Corporation's third amended plan of reorganization is denied.

Discussion

Fred Triem has filed extensive objections to confirmation for the Hanson class. In addition to reviewing the objections of creditors and parties in interest, the court TOP       7 ABR 96  retains an independent duty to review a chapter 11 plan for compliance with the confirmation requirements of 11 U.S.C. § 1129. (1)

The Hanson class is an impaired class and is listed as a disputed creditor in the debtor's schedules. Chapter 11 creditors holding disputed claims must file proofs of claim. (2) None of the voting members of the Hanson class have filed proofs of claim nor has Mr. Triem filed a proof of claim on behalf of this class. (3) Only holders of allowed claims or interests may accept or reject the plan. (4) None of the votes submitted by the Hanson class members, nor the vote of Mr. Triem, purportedly on behalf of the entire class, were made by a creditor with an allowed claim. Accordingly, the votes submitted by the Hanson class cannot be counted for purposes of confirmation. Impaired classes which fail to vote have not accepted the plan. (5)

Because the Hanson class has not accepted the plan, the cramdown provisions of 11 U.S.C. § 1129(b)(2)(B) apply. The amount due the Hanson class is not disputed; only the extent of its security. The Hanson class must receive the full present value of its debt, whether secured or not. (6) No evidence was presented at confirmation which indicated that the 6% interest rate provided in the plan would yield the present TOP       7 ABR 97  value of the Hanson class debt. Moreover, payments due the Hanson class are not payable over a definite term. It is impossible for the court to make the present value determination needed to ensure cramdown compliance. (7) Confirmation must, therefore, be denied.

DATED: April 26, 2001.

 

                  BY THE COURT



                  DONALD MacDONALD IV
                  United States Bankruptcy Judge


N O T E S:


1. In re Chandler Airpark Joint Venture One, 163 B.R. 566 (Bankr. D. Ariz. 1992).
2. Fed. R. Bankr. P. 3003(c)(2). 3. It appears that notice of the claims bar deadline was not given to Mr. Triem or the individual members of the Hanson class. None of these parties were listed on the mailing matrix used for serving notice of the claims bar date and the § 341 meeting.
4. 11 U.S.C. § 1126(a).
5. In re Higgins Slacks Co., 178 B.R. 853 (Bankr. N.D. Ala. 1995).
6. In re Johnston, 21 F.3d 323, 329 (9th Cir. 1994).
7. United Sav. Ass'n. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 377 (1988); In re Camino Real Landscape Maint. Contractors, Inc., 818 F.2d 1503, 1505 (9th Cir. 1987).