In re Logan Christopher Hisaw

Summary

This memorandum decision addresses confirmation of Logan Christopher Hisaw’s Third Amended Plan of Reorganization under Subchapter V of Chapter 11. The court denied consensual confirmation under 11 U.S.C. § 1191(a) because two impaired classes did not vote, but determined that the plan could be confirmed nonconsensually under § 1191(b), subject to amendments. The court permitted a temporary injunction protecting closely related non-debtor parties, rejected the proposed monthly savings fund, and required discharge to be delayed until completion of the five-year plan period.

Holdings

1. An impaired class that casts no votes has not accepted the plan, and the plan therefore cannot satisfy 11 U.S.C. § 1129(a)(8) or be confirmed consensually under § 1191(a).
2. The plan may be confirmed nonconsensually under 11 U.S.C. § 1191(b), subject to deletion of the Savings Fund provisions and amendment of the discharge provision.
3. A temporary third-party injunction may be included in a Chapter 11 plan when the debtor demonstrates that the injunction is necessary to the viability of the plan.
4. The proposed Savings Fund could not be approved because the Debtor failed to show that the deposits were necessary for the continuation, preservation, or operation of the business and failed to establish statutory support for withholding projected disposable income from plan payments.
5. When a Subchapter V plan confirmed under § 1191(b) provides for five years of payments, discharge must be delayed until completion of the five-year plan period.

Questions Presented

1. Whether a Subchapter V plan may be confirmed consensually under 11 U.S.C. § 1191(a) when an impaired class does not cast any votes.
2. Whether the plan may be confirmed nonconsensually under 11 U.S.C. § 1191(b) despite the absence of affirmative acceptance by two impaired classes.
3. Whether the plan may include a temporary injunction against creditors pursuing closely related nondebtor guarantors, Insiders, and Affiliates.
4. Whether the Debtor may retain projected disposable income in a Savings Fund rather than dedicate it to plan payments.
5. Whether the Debtor may receive a discharge after three years when the plan requires payments for five years.

Disposition

other