United States v. Wabash Valley Power Ass'n

How later courts describe this case

• A creditor was impaired where its position might be enhanced by participating in a settlement agreement where viability of its claim was contingent on the plan being confirmed.
• “In its origins, the absolute priority rule was a judicial invention designed to preclude the practice in railroad reorganizations of ‘squeezing out’ intermediate unsecured creditors through collusion between secured creditors and stockholders (who were often the same people.”)