IN RE FIGTER LIMITED
118 F.3d 635 (1997)
NATURE OF THE CASE: Figter (P) appealed a judgment which affirmed the bankruptcy court's
order approving transfer of claims.
FACTS: P filed Chapter 11. P owns Skyline Terrace, a 198-unit residential apartment
complex located in Los Angeles. Teachers (D) is a creditor. D holds a $15,600,000 promissory
note executed by P. The note is secured by a first deed of trust on Skyline Terrace and by
$1,400,000 of cash on hand. D is P's only secured creditor and is the only member of Class 2
in a reorganization plan proposed by P. P was to pay D in full but at a disputed rate of
interest. Under P's plan, D's claim is not impaired. Class 3 unsecured claims would get 80%
of their face value. D opposed the plan and proposed its own, which provided for the
transfer of Skyline Terrace and the cash collateral to D in satisfaction of its secured
claim, as well as a payment of Class 3 unsecured claims at 90%. D then purchased twenty-one
of the thirty-four unsecured claims in Class 3 at one hundred cents on the dollar, for a
total purchase price of $14,588.62. D then filed notices of transfer of claims with the
court. No objections were filed by the unsecured creditors. The district court upheld the
bankruptcy court's determination regarding D's purchase of the unsecured claims. P's plan is
unconfirmable because it is unable to meet the requirements of §1129(a)(10); there will not
be an impaired, consenting class of claims. That will preclude a 'cram down' of D's secured
claim under §1129(b). P appealed. P contends that D should be precluded from voting its
purchased Class 3 claims because it did not buy them in good faith. Even if the claims were
purchased in good faith, P asserts that D cannot vote them separately, but is limited to one
total vote as a Class 3 creditor.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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