Matter of Greystone III Joint Venture

United States Court of Appeals for the Fifth Circuit

995 F.2d 1274 (5th Cir. 1991)

Unsecured claims that are substantially similar may not be classified separately for the sole purpose of manipulating a plan-confirmation vote.

Relevant Facts

Phoenix Mutual Life Insurance Corporation (the plaintiff) loaned $8.8 million to Greystone III Joint Venture (the defendant) to purchase an office building. The loan was secured by a first lien on the property. When the defendant defaulted, the plaintiff initiated foreclosure proceedings. The defendant then filed a Chapter 11 bankruptcy petition. At that point, the defendant owed approximately $9.3 million to the plaintiff, $10,000 to other creditors, and $145,000 to taxing authorities. The bankruptcy court valued the office building at approximately $5.8 million, leaving the plaintiff with an unsecured deficiency of $3.5 million. Under Chapter 11, the defendant proposed a reorganization plan under which unsecured claims were separated into three classes: (1) the plaintiff’s deficiency claim, (2) the trade creditors’ claims, and (3) claims held by office-building tenants in their security deposits. Under the proposed plan, the plaintiff and the trade creditors would be entitled to three to four cents on the dollar but the trade creditors’ balance would be paid in full after plan confirmation. The tenants, whose leases would be assumed by the plaintiff, would receive 25% of their deposits on plan approval and 50% on the expiration of their leases. The balance would be paid on plan confirmation. The plaintiff objected to the plan. At a confirmation hearing, the defendant orally modified the plan to withdraw the post-confirmation payments to the trade creditors and tenants.

The bankruptcy court ruled that the tenants were not entitled to vote but that the plan was otherwise confirmable. The district court affirmed plan confirmation but disagreed with the bankruptcy court as to the tenants, concluding that they were entitled to vote. The plaintiff appealed.

Issue

Get access to our database of over 17,000+ case briefs today. Access our issue statements for every case you'll encounter in law school for a low monthly price. The largest database on the internet is now available with Lawwly, the central legal hub. Use our case briefs to comprehend your casebook readings in seconds, to supplement your notes and outlines, and to outshine your classmates. No one has a more comprehensive case brief database than Lawwly. All of our briefs are handwritten by real legal experts and law professors and our stringent editing process ensures you'll get the best quality briefs available.

Holding & Reasoning

Get access to our database of over 17,000+ case briefs today. Access holding & reasonings for every case you'll encounter in law school for a low monthly price. The largest database on the internet is now available with Lawwly, the central legal hub. Use our case briefs to comprehend your casebook readings in seconds, to supplement your notes and outlines, and to outshine your classmates. No one has a more comprehensive case brief database than Lawwly. All of our briefs are handwritten by real legal experts and law professors and our stringent editing process ensures you'll get the best quality briefs available.

Concurrence

Get access to our database of over 17,000+ case briefs today. Access all available concurrences for every case you'll encounter in law school for a low monthly price. The largest database on the internet is now available with Lawwly, the central legal hub. Use our case briefs to comprehend your casebook readings in seconds, to supplement your notes and outlines, and to outshine your classmates. No one has a more comprehensive case brief database than Lawwly. All of our briefs are handwritten by real legal experts and law professors and our stringent editing process ensures you'll get the best quality briefs available.

Dissent

Get access to our database of over 17,000+ case briefs today. Access all available dissents for every case you'll encounter in law school for a low monthly price. The largest database on the internet is now available with Lawwly, the central legal hub. Use our case briefs to comprehend your casebook readings in seconds, to supplement your notes and outlines, and to outshine your classmates. No one has a more comprehensive case brief database than Lawwly. All of our briefs are handwritten by real legal experts and law professors and our stringent editing process ensures you'll get the best quality briefs available.

Last updated:

December 12, 2020

Judicial Opinion

Get access to our database of over 17,000 case briefs today. Our database of judicial opinions will be released soon, for free!

Procedural History

Get access to our database of over 17,000+ case briefs today. Access the entire procedural history for every case you'll encounter in law school for a low monthly price. The largest database on the internet is now available with Lawwly, the central legal hub. Use our case briefs to comprehend your casebook readings in seconds, to supplement your notes and outlines, and to outshine your classmates. No one has a more comprehensive case brief database than Lawwly. All of our briefs are handwritten by real legal experts and law professors and our stringent editing process ensures you'll get the best quality briefs available.

Citations

995 F.2d 1274 (5th Cir. 1991)