Section 1129(a)(10) Requirement
The Section 1129(a)(10) Requirement is the Chapter 11 confirmation rule that, when at least one class of claims is impaired, at least one impaired class of claims must accept the plan without counting acceptances by insiders.
How it works
The requirement is separate from the rule that every class must accept or be unimpaired under Section 1129(a)(8). Section 1129(a)(10) supplies a minimum impaired-creditor acceptance condition before cramdown can proceed. It applies to a class of claims, not a class consisting only of equity interests, and insider votes are excluded when determining whether the qualifying class accepted.
The requirement applies when a claims class is impaired
Section 1129(a)(10) is triggered if a class of claims is impaired under the plan.
At least one impaired claims class must accept
The statute requires acceptance by one impaired class of claims before confirmation can proceed when the condition applies.
Insider acceptances are excluded for this purpose
The qualifying class must be determined without including insider acceptances, even though insider claims can present different questions in ordinary class-vote calculations.
The rule does not replace the other confirmation requirements
Satisfying Section 1129(a)(10) does not prove feasibility, good faith, best interests, fair-and-equitable treatment or compliance with the rest of Section 1129.
Worked example: one accepting class opens the cramdown path
A plan has four impaired classes. Three vote no. One trade class votes yes by the Section 1126 thresholds without relying on insiders. Section 1129(a)(10) can be satisfied even though the other rejecting classes still require cramdown analysis.
Multi-debtor cases can create additional issues
Joint plans involving multiple debtors can raise questions about how Section 1129(a)(10) applies across entities. The governing plan structure and controlling case law should be checked rather than assuming one universal multi-debtor rule.
Common mistakes
Counting equity-only acceptance; counting insider votes for the qualifying class; treating one accepting holder as equivalent to class acceptance; and assuming Section 1129(a)(10) by itself authorizes cramdown.
Example
A debtor has three impaired creditor classes. Two reject the plan. The third class accepts by the required Section 1126 voting thresholds, but all accepting claims in that class are held by insiders. That class cannot satisfy Section 1129(a)(10) because insider acceptances are excluded for this specific confirmation requirement.
Example
A debtor has three impaired creditor classes. Two reject the plan. The third class accepts by the required Section 1126 voting thresholds, but all accepting claims in that class are held by insiders. That class cannot satisfy Section 1129(a)(10) because insider acceptances are excluded for this specific confirmation requirement.
Professional note
Keep class acceptance and Section 1129(a)(10) separate. A class can technically accept under Section 1126 yet fail to serve as the qualifying impaired accepting class for Section 1129(a)(10) if insider votes are necessary to produce the acceptance.
Related terms
- Cramdown
Cramdown is the Chapter 11 mechanism under Bankruptcy Code Section 1129(b) that can allow a court to confirm a plan despite rejection by an impaired class, if the statutory confirmation requirements are satisfied and the plan does not discriminate unfairly and is fair and equitable with respect to the rejecting class.
- Impaired Class
An Impaired Class is a Chapter 11 class of claims or interests whose legal, equitable or contractual rights are altered by the plan in a manner that does not qualify as unimpaired treatment under Bankruptcy Code Section 1124.
- Plan of Reorganization
A Plan of Reorganization is the Chapter 11 plan that sets the classification and treatment of claims and interests and establishes the transactions, distributions, governance and other steps through which the debtor will reorganize or otherwise resolve the bankruptcy case.
- Joint Administration
Joint Administration is a bankruptcy case-management procedure that allows related cases to share administrative functions such as a docket, notices, hearings and claims-management processes while generally preserving the separate assets, liabilities and creditor rights of each debtor.
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