Editors’ Note: This article has been updated to reflect a Correction.
On Jan. 19, 2012, the U.S. Court of Appeals for the Seventh Circuit in an opinion penned by Judge Richard Posner affirmed a bankruptcy court’s dismissal of In re River East Plaza, LLC, a single asset real estate case, rejecting the debtor’s attempt to substitute the lender’s original collateral for another form of security and pay out the secured claim over time pursuant to the “cramdown” provisions of the Bankruptcy Code. The court’s analysis was strongly pro-secured lender and hinged particularly on the question of whether the secured creditor should be entitled to the appreciation of future value of its original prepetition collateral.
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