Kim

Debtors Peter and Un C. Kim filed a Chapter 13 bankruptcy plan treating appellant Ardmor Vending Co. dba Great Northern (“Great Northern”) as partially secured and Ardmor Co. Profit Sharing Plan (“Ard-mor PSP”) (together “appellants”) as wholly unsecured. - Appellants objected to the plan on the basis that the Kims had undervalued the collateral securing their claims, and the Kims then objected to appellants’ claims. The bankruptcy court sustained the Kims’ objections and confirmed the plan. Appellants appeal from the Bankruptcy Appellate Panel’s (BAP) affirmance of the bankruptcy court. At issue is the method of valuation of appellants’ collateral, given their security interests in both the equipment and the lease of the Kims’ dry cleaning business. We have jurisdiction pursuant to 28 U.S.C. § 158 (d), and we reverse.

I. BACKGROUND

The Kims, operators of a dry cleaning business, filed a voluntary petition under Chapter 13 of the Bankruptcy Code. At the time of filing, the Kims owed Great Northern approximately $98,000, secured by the dry cleaning equipment and the lease of the business premises. In addition, they owed Ard-mor PSP approximately $10,000, secured by the…