Singling out one or more creditors for less favorable treatment than other creditors holding similar claims. Debtors sometimes attempt to give such treatment to the lender’s unsecured deficiency claim by, for example, paying the claim on terms less favorable than provided for unsecured creditors generally. Section 1129(b)(1) precludes confirmation of plans that unfairly discriminate (unless all classes accept their treatment under the plan, including any unfair discrimination).
Bankruptcy Code § 1129(b)(1). See also Confirmation Requirements, Gerrymandering.