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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.

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