I.   The State of the Courts

            During a Chapter Eleven reorganization, if the proposed plan of reorganization is not accepted by all classes, the court is justified in confirming the plan, if at least one impaired class without any insiders accepts the plan.[1]A class is considered impaired if the legal, equitable, or contractual rights are altered,[2]or other deficiencies that one would normally consider an impairment.[3]Similarly, an insider is defined for each type of possible debtor,[4]but most definitions are concepts that would normally invoke the idea of an insider, such as a relative of an individual,[5]or officer of a corporation.[6]If a tax claim can comprise a class, and if the court considers it impaired, it would satisfy the requirements of the needed class for a cram down.

            While unsecured tax claims have very defined rights, in terms of treatment under the plan,[7]being guaranteed a class,[8]and priority rights within the distribution,[9]these rights do not necessarily extend to secured tax claims.


[1]           11 U.S.C. 1129(a)(10) (2012).

[2]           § 1124(1).

[3]           § 1124(2) lists five categories ranging from compensating the holder for damages to reinstating the maturity of the claim.

[4]           § 101(31).

[5]           § 101(31(A)(i).

[6]           § 101(31)(B)(ii).

[7]           § 1129(a)(9)(C).

[8]           § 1129(a)(9)(B).

[9]           § 507(a)(8).