An element of Ch. 11 is that through the Plan the sorting of creditor claims into a particular class, with other substantially similar claims is allowed. A legitimate business purpose must be shown to warrant creation of a separate class of claims though.
If the Plan changes a claim holder’s legal or contract rights this is an impaired claim. It’s permitted, to propose making up overdue payments to a secured creditor, without this becoming an impaired claim.
Each impaired claim class gets to vote on confirming the Plan. Further, only one impaired class needs to vote in favor of the Plan, providing it “doesn’t discriminate unfairly, and that it’s fair and equitable”.
In the bankruptcy of Christian Love Fellowship Ministries creditor ECCU objected to the 2nd Amended Plan. At issue was that the Debtor classified ECCU’s mortgage deficiency claim singularly separate, from other unsecured claims. This classification would pay ECCU substantially less money, than if they were included along with all of the other unsecured claims.
With regard to the small number, type, and amount total, of the filed unsecured claims, the Bankruptcy Court for the Eastern District of MI, Southern Division viewed “the proposed classification in this case is primarily for the purpose of obtaining a consenting class which approves the proposed plan”. The ECCU deficiency and the claims of the other unsecured creditors were not unique enough, to justify their separate classifications in the Opinion of the Court.