I'd like to thank a friend, who'd rather remain anonymous, for bringing this to my attention.
In the Indiana Pensioners' Application to the Supreme Court, they use one of the arguments that I've discussed (but I didn't use legal precedent) to argue against the value in the plan being rushed by the Debtor.
Specifically, they refer to an opinion written by Justice Ginsburg, in an 8-1 decision, for Associates Commercial Corp. v. Rash Et Ux. in which a Chapter 13 Debtor attempted to cram down their secured creditor and apply a liquidation value as the basis for the value of the secured claim. The Court held that the value for a secured property that is being used, as opposed to liquidated, is the replacement cost. This is based on the second sentence of §506(a), which read (at the time) "Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest" By the way, the second paragraph was added in 2005, after the 1997 decision (and clarifying the matter for individual debtors).
The argument is that the Debtor is claiming that the creditors are only due a payment (originally based on liquidation value) calculated using one methodology, while those same assets are effectively being valued in another manner as part of NewChrysler. The case argues for the use of the going concern value of the property if that property is to be used in a going concern.
Section 506(a) in its entirety is:
Here is the case:
(1) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 if this title, is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor’s interest or the amount so subject to setoff is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest.
(2) If the debtor is an individual in a case under chapter 7 or 13, such value with respect to personal property securing an allowed claim shall be determined based on the replacement value of such property as of the date of the filing of the petition without deduction for costs of sale or marketing. With respect to property acquired for personal, family, or household purposes, replacement value shall mean the price a retail merchant would charge for property of that kind considering the age and condition of the property at the time value is determined.
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