Fed. Nat'l Mortgage Ass'n v. Village Green I, GP, 483 B.R.
807 (W.D. Tenn. 2012) –
Fannie Mae objected to a "cramdown" plan of
reorganization, arguing that (i) the accepting class of creditors
was artificially impaired, (ii) the modification of its rights
under its loan agreement was not fair and equitable, (iii) the
interest rate on its unsecured deficiency claim was not sufficient,
and (iv) the debtor did not propose the plan in good faith based on
its misrepresentations and submission of a series of unconfirmable
plans. The bankruptcy court confirmed the plan, and Fannie
Mae appealed.
The debtor, Village Green I, GP, owned an apartment complex that
it bought in the summer of 2005 for $10.18 million. It
assumed a Fannie Mae loan that was originally due October 1,
2013, with interest at the rate of 5.98% per annum, and with
payments based on a 30-year amortization, resulting in a balloon
payment due at maturity.
