All chapter 11 debtors need to have an impaired accepted class under § 1129(a) (10) of the Bankruptcy Code. The limits on a debtor’s ability to “artificially” impair a class to satisfy § 1129(a)(10) may determine whether a debtor can reorganize. In Western Real Estate Equities LLC v. Village at Camp Bowie I LP (In re Village at Camp Bowie I LP), the U.S. Court of Appeals for the Fifth Circuit addressed “artificial” impairment. Under the plan proposed by the debtor, Village at Camp Bowie I LP, there were two impaired classes of creditors. One class included the oversecured claim of Western Real Estate Equities LLC, and a second class included unsecured claims.
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