2
1




                                               NONPRECEDENTIAL DISPOSITION
                                                To be cited only in accordance with
                                                        Fed. R. App. P. 32.1


                                    United States Court of Appeals
                                                    For the Seventh Circuit
                                                    Chicago, Illinois 60604

                                                       Submitted  June  17,  2014∗  
                                                         Decided  June  23,  2014  
      
      
                                                               Before  
      
                                                 JOEL  M.  FLAUM,  Circuit  Judge  
      
                                                 FRANK  H.  EASTERBROOK,  Circuit  Judge  
      
                                                 ILANA  DIAMOND  ROVNER,  Circuit  Judge  
      
      
                                                                                 Appeal  from  the  United  
    No.  14-­‐‑1735  
                                                                                 States  Bankruptcy  Court  for  
    IN  THE  MATTER  OF:                                                         the  Southern  District  of  
                                                                                 Indiana,  Indianapolis  
           CASTLETON  PLAZA,  LP,                                                Division.  
              Debtor-­‐‑Appellant.                                                 
                                                                                 No.  11-­‐‑01444-­‐‑BHL-­‐‑11  
                                                                                 Basil  H.  Lorch  III,  Judge.  
                                                                     

                                                                Order  
      
        Our  first  decision  in  this  case  held  that  “[a]n  impaired  lender  who  objects  to  any  
    plan  that  leaves  insiders  holding  equity  is  entitled  to  the  benefit  of  competition.”  In  re  
    Castleton  Plaza,  LP,  707  F.3d  821,  824  (7th  Cir.  2013).  We  remanded  with  the  expectation  




    ∗  This  successive  appeal  has  been  submitted  to  the  original  panel  under  Operating  Procedure  6(b).  After  

    examining  the  briefs  and  the  record,  we  have  concluded  that  oral  argument  is  unnecessary.  See  Fed.  R.  
    App.  P.  34(a);  Cir.  R.  34(f).  
No.  14-­‐‑1735                                                                            Page  2  

that  Castleton  Plaza  (the  debtor)  would  propose  a  plan  that  either  eliminated  the  
insiders’  equity  interest  or  allowed  competition.  
  
      Castleton  proposed  new  plans,  but  all  of  them  retained  an  equity  stake  for  insiders  
and  omitted  any  opportunity  for  competition.  The  bankruptcy  judge  disallowed  all  of  
these  plans,  ruling  that  they  failed  to  comply  with  this  court’s  mandate.  Given  one  final  
opportunity  to  propose  a  plan  that  either  removed  the  insiders’  interest  or  allowed  
competition,  Castleton  refused.  The  bankruptcy  court  dismissed  the  proceeding,  and  
the  debtor  has  appealed.  
  
      It  contends  that  competition  is  unnecessary  because  EL-­‐‑SNPR,  the  secured  lender,  
will  be  paid  in  full  and  is  not  “impaired”.  The  problem  with  that  argument  was  noted  in  
our  first  opinion.  All  of  Castleton’s  proposed  plans  materially  change  the  terms  of  the  
loan,  deferring  payment  for  as  long  as  30  years  (so  that  if  the  real  estate  market  declines  
during  that  time  the  lender  will  not  be  paid),  reduce  the  rate  of  interest,  and  eliminate  
several  security  features  of  the  transaction.  That  is  not  a  promise  of  full  repayment.  EL-­‐‑
SNPR  is  impaired  under  the  proposed  plans.  
  
      The  bankruptcy  court  properly  implemented  this  court’s  decision.  The  bankruptcy  
is  over,  and  the  lender  can  foreclose  in  the  ordinary  course.  If,  as  debtor  maintains,  the  
collateral  is  worth  more  than  the  loan,  then  it  can  find  another  source  of  capital  and  
outbid  EL-­‐‑SNPR  at  the  auction.  
  
                                                                                                  AFFIRMED  

  

  
  
  
  
