Bryson Properties, XVIII v. Travelers Insurance Co.

How later courts describe this case

• holding that separate classification was “clearly for the purpose of manipulating voting and it may not stand”
• recognizing that this prohibition, also known as the “absolute priority rule,” is codified in 11 U.S.C. § 1129(b)(2)(B)(ii)
• noting that “where all unsecured claims receive the same treatment in terms of the Plan distribution, separate classification on the basis of natural and unnatural recourse claims is, at a minimum, highly suspect”
• noting that in the debtor’s plan, which the court rejected as violating the absolute priority rule, “the equity-holders have given themselves not only the exclusive right to contribute, but the right to return of their new capital prior to Travelers’ recovery of its unsecured claim.”
• applying Miles to personal injury cases under the Jones Act and noting “[a]lmost every court that has decided this question has held, as we do today, that Miles precludes recovery for loss of society”
• “Where legal claims are sufficiently different as to justify a difference in treatment under a reorganization plan, reasonable differences in treatment are permissible.”
• right to make § 1111(b) election requires separate classification of deficien cy when debtor is a single-asset partnership
• “Jones Act limits a seaman’s recovery for injury to pecuniary losses and precludes recovery for nonpecuniary losses”