You are presuming that it is only Classes 3 and 4 that favor substantive consolidation - if you are right then I don't think there will be enough votes to pass substantive consolidation.
I think there are other parties that may also be interested in substantive consolidation.
2 examples -
In the LBI State of the Estate it says about 11 billion in claims are subject to subordination. Upon further research I found that these claims are not likely to receive a recovery - if I am correct then I presume these creditors - general unsecured claims - would favor substantive consolidation.
In addition -The Minnesota State Board of Investments filed a Joinder to the preliminary objection in support of the senior bondholders requests - and yet MSBI holds claims against the subsidiaries LBI and LBSF as well as LBHI -
White & Case, LLP, attorneys for the Ad Hoc Group, filed the Objection on June
29, 2010. MSBI files this Joinder in support of the Objection, because MSBI concurs that the
size and complexity of the Debtors’ joint bankruptcy cases, coupled with the sheer enormity of
value and number of the inter-debtor claims, call for certain measures to be taken to insure a fair
and open process in which the unsecured creditors of LBHI and its affiliates will be able to
protect their interests - and at the same time ensuring a orderly and cost-effective process to
minimize waste.
In my calculations there were several subsidiaries that would have a higher recovery under substantive consolidation.
Mr. Marsal is giving the impression that it is only LBHI creditors that favor substantive consolidation and yet the above statement by the Minnesota State Board of Investments - that have claims against 2 subsidiaries of LBHI - seems to indicate otherwise.
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