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Copyright © International Chamber of Commerce (ICC). All rights reserved. ( Source of the document: ICC Digital Library )
1998 LC CASE SUMMARIES Case No. 96-21187-11-JTF, 219 B.R. 587 (Bankr. D. Kan. 1998)
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Article
LC Use:Substitution of LC for Creditor's Liens in Bankruptcy.
Note:The Bankruptcy Court for the District of Kansas, Flannagan, J., ruled that the proposed substitution of a standby LC for a creditor's liens as part of a reorganization plan was not fair and equitable to the dissenting secured class under the "indubitable equivalent" standard. That standard allows a court to find a plan fair and equitable if a class of secured claims can realize the indubitable equivalent of its claims. No actual LC was presented as part of the plan and no enforceable commitment was made by the debtor to provide such a credit. Therefore, the creditors had no assurances that the LC would be forthcoming. The court noted that the plan might have been accepted had an actual LC been presented.
©1999 INSTITUTE OF INTERNATIONAL BANKING LAW & PRACTICE
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The views expressed in this Case Summary are those of the Institute of International Banking Law and Practice and not necessarily those of ICC or the other partners in DC-PRO.