Cite as: 518 U. S. 213 (1996)
Opinion of the Court
unsecured basis.10 CF&I's reorganization plan did not lump all unsecured claims in one nonpriority class, however, but instead created four classes of unsecured creditors, only the first two of which would receive funds: Class 11 comprised small claims ($1,500 or less) grouped together for administrative convenience, see 11 U. S. C. § 1122(b); Class 12 comprised general unsecured claims (except for those assigned to other classes); Class 13 covered the § 4971 claim and some other (much smaller) subordinated penalty claims; and Class 14, claims between the CF&I Steel Corporation and its subsidiaries (all of which were bankrupt), the net value of which was zero. The plan provided, nonetheless, that if a court determined that a Class 13 claim should not be subordinated, or that the Class 13 claims should not be separately classified, the claim or claims would be placed in Class 12. Appel-lees' App. in No. 94-4034 et al., at 95-101, 137-141, 196-200.
When the Government challenged the proposal to subordinate its claim, the Bankruptcy Court confirmed the reorganization plan, App. to Pet. for Cert. A-31, and ordered that the § 4971 claim be "subordinated to the claims of all other general unsecured creditors of [CF&I] pursuant to 11 U. S. C. § 510(c)." Id., at A-21. The District Court subsequently ruled that the § 4971 claim "should be equitably subordinated to the claims of the general creditors under Section 510(c)." Id., at A-18. In the Tenth Circuit, the Government again contested subordination under § 510(c), which CF&I defended, even as it sought to sustain the Bankruptcy Court's result with two new, alternative arguments: first, that 11 U. S. C. § 1122(a), restricting a given class to substantially similar claims, prohibited placement of the § 4971 claim in Class 12, because of its dissimilarity to other
10 Cf. § 57(j) of the 1898 Act, 30 Stat. 561 ("Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose").
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