The Applicability of the § 1111(b) Election in a Small Business Case.

The court rejected the debtor's contention that liquidation value, not going-concern value, should control and accepted First Bank's enterprise-valuation approach as the first step in determining "inconsequential value." 5 The debtor objected to the § 1111 (b) election because the collateral value was "inconsequential" and separately moved for a valuation of the creditor's secured claim. 3 If given effect, the § 1111 (b) election would require the debtor to make payments to First Bank that totaled at least the amount of its claim of $970,000 but with a present value equal to the value of the collateral. Feature Feature By t hoMAs c. s cherer And w hitney l. M osBy I n a case of first impression under the Small Business Reorganization Act of 2019 (SBRA), the court in In re Body Transit Inc. 1 was faced with the application of 11 U.S.C. § 1111 (b) in the context of confirming a small business debtor's plan. [Extracted from the article]