Good ole Bank of America National Trust and Savings Assn v. 203 North LaSalle Street Partnership.
34. The Joint Plan violates the absolute priority rule because it provides Yucaipa, one of the Debtors’ controlling shareholders, at least a partial recovery on account of its equity interests, without paying unsecured classes in full. In fact, according to the Supreme Court of the United States, the Debtors’ very offer to Yucapia of the opportunity to purchase its equity, without market-testing Yucaipa’s bid, violates the absolute priority rule. See Bank of Am. Nat’l Trust & Savs. Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434, 458 (1999) (“[A]ssuming a new value corollary ... plans providing junior interest holders with exclusive opportunities free from competition and without benefit of market valuation fall within the prohibition of §1129(b)(2)(B)(ii).”).
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