Motive Counts When Voting on a Plan by: Harold S. Berzow

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Hon. Robert E. Gerber recently issued two decisions related to voting on the debtor’s plan in In re DBSD North America Inc., case number 09-13061 (REG) in the U.S. Bankruptcy Court for the Southern District of New York that have broader implications for plan confirmation in bankruptcy cases. The first decision[1] dealt with the debtor’s motion to designate DISH Network’s vote to reject its plan. DISH became the sole holder of senior debt in a class of secured creditors by purchasing, at par, all the claims with the stated purpose of acquiring control of the asset that collateralized the debt. It also purchased second-lien debt only from sellers who were not bound by an agreement to support the debtor’s plan. DISH recognized that it was overpaying for the debt, but was willing to make the investment because it had an interest in the underlying assets and wanted a relationship with an affiliated entity of the debtor.

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