Impaired Class

A class of creditors or equity interest holders whose legal, equitable, or contractual rights are altered by a proposed Chapter 11 plan.

Lenders frequently hold a claim for accelerated payment on account of a default by the borrower. A plan may treat such a claim as “unimpaired” despite the acceleration if the plan meets the requirements of Section 1124(2).

Bankruptcy Code § 1124. See also Impairment, One-Impaired-Class-Must-Accept-The-Plan Rule.

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