Spieker Properties, L.P. v. SPFC Liquidating Trust

This appeal challenges the bankruptcy court’s confirmation of the Second Amended Plan of Reorganization (the “Plan”) of Debtor Southern Pacific Funding Corporation (“SPFC”), in a case under Chapter 11 of the Bankruptcy Code. The challenge is brought by Appellant Spieker Properties, SPFC’s landlord and an unsecured creditor. 1 Appellees are the liquidating trust created by the Plan and the trustees under the indenture agreement that is the focus of Spieker’s objections. The district court had jurisdiction over Spieker’s appeal pursuant to 28 U.S.C. § 158 (a), and it affirmed the bankruptcy court. It held that enforcement of the subordination provisions at issue did nothing to alter the rights or obligations of the debtor in violation of 11 U.S.C. § 365 (e). We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 158 (d), and we affirm the district court.

I. Background

In 1996, SPFC entered into an indenture agreement (the “Indenture”) regard *714 ing the issuance by SPFC of “convertible subordinated notes” (the “Notes”) in an aggregate principal amount of approximately $86 million. Sections 12.1-12.12 of the Indenture are its subordination provisions. They…