Ninth Circuit Holds That Valuation of Secured Creditor’s Collateral in Chapter 11 Need Not Be Based on Property’s Highest and Best Use

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On May 26, 2017, an en banc panel of the Ninth Circuit Court of Appeals issued an opinion with important ramifications for secured lenders. The Ninth Circuit held that for purposes of determining the amount of a secured claim under a Chapter 11 plan, the collateral should be valued based on the debtor’s proposed post-reorganization use of the property, even if the collateral would generate more value in a foreclosure sale.

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