In Re Mohammad Samih Barakat, Debtor. Mohammad Samih Barakat v. The Life Insurance Company of Virginia

Debtor-appellant Mohammad Samih Bara-kat (“Barakat” or “Debtor”) sought confirmation of a Plan of Reorganization (the “Plan”) filed under Chapter 11 of the Bankruptcy Code. The bankruptcy court denied confirmation of the Plan, finding that it was impermissible for the Plan to: (1) separately classify from the class of general unsecured creditors the unsecured mortgage deficiency claim of The Life Insurance Company of Virginia; (2) separately classify the unsecured pre-bankruptcy claims of creditors who continue to do business with Debtor; and (3) identify security deposit creditors as an “impaired” class. Debtor appealed the bankruptcy court’s findings to the district court, which affirmed. We have jurisdiction over this appeal pursuant to 28 U.S.C. § 158 (d), and we affirm the district court.

FACTUAL BACKGROUND

Kittridge Garden Associates (“EGA”), a California general partnership, owned and managed an 85-unit, three-story residential apartment building located at 14420 Kit- tridge Street, Van Nuys, California (the “Kit-tridge property”)- On August 25,1988, KGA executed a promissory note, secured by a first deed of trust on the Kittridge property, in favor of The Life Insurance…