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In re Deming Hospitality, LLC

2013 WL 1397458 (2013)

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In re Deming Hospitality, LLC

United States Bankruptcy Court for the District of New Mexico

2013 WL 1397458 (2013)

Facts

Deming Hospitality, LLC (debtor) filed a petition for chapter 11 bankruptcy and submitted a proposed reorganization plan. The plan split creditors’ claims into eight classes, including one class for general unsecured claims and one class for a $1.5 million deficiency claim by the United States Small Business Administration (SBA). The plan provided that the general unsecured creditors would be paid 75 percent of their claim amounts within 30 days of the plan’s effective date. The plan also provided that the SBA would be paid $25,000 on its claim within 30 days of the plan’s effective date. The SBA asserted that the plan was facially unconfirmable and told the bankruptcy court that the SBA would vote to reject the plan because the treatment of the SBA’s claim violated the Bankruptcy Code’s prohibition against unfair discrimination. The SBA indicated that it would agree to vote for a plan that treated all of Deming’s unsecured claims the same.

Rule of Law

Issue

Holding and Reasoning (Thuma, J.)

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