Quinn Emanuel Partner Patty Tomasco and Associate Joanna Caytas Published in the American Bankruptcy Institute Journal on § 1129(a)(10)

Quinn Emanuel Partner Patty Tomasco and Associate Joanna Caytas were published in the American Bankruptcy Institute Journal to discuss § 1129(a)(10). Under § 1129(a)(10), if a class of claims is impaired under the plan, at least one impaired class must accept the plan. However, insider classes cannot be the sole impaired accepting class. Thus, if all noninsider creditor classes are unimpaired, but insiders accept less than full payment on their claims, the accepting insiders’ contributions to other classes paradoxically hinder plan confirmation, even though all noninsiders are paid in full. In this article, they provide insight to some potential solutions that may address this dilemma.