In re Mangia Pizza Investments
United States Bankruptcy Court for the Western District of Texas
480 B.R. 669 (2012)
Mangia Pizza Investments (debtor) filed for chapter 11 reorganization. HEB Grocery Company (creditor) held an unpaid-rent claim against the estate after Mangia rejected its pre-petition lease, and that claim was fully secured by a security deposit already in HEB's possession. Mangia proposed a reorganization plan leaving HEB's claim untouched. A competing creditor, Cloud Cap, bought a claim from another creditor and filed a rival plan that instead required Mangia to pay HEB's claim with separate funds within 30 days, rather than by instant setoff against the deposit. Cloud Cap argued this 30-day delay made HEB an impaired creditor, which would give HEB a vote on the plan. Mangia objected, arguing this was an artificial attempt to manufacture voting rights.
Whether, under the bankruptcy code, a claim is impaired for purposes of allocating plan-voting rights if the plan limits the claimant's legal, equitable, or contractual rights.