In re Rexford Properties LLC

OPINION RE: CLASSIFICATION AND IMPAIRMENT

Rexford Properties LLC, debtor and debtor in possession herein (“Rexford” or the “Debtor”), requests pursuant to Federal Rule of Bankruptcy Procedure 3013 (“Rule 3013”) an order: (i) approving a proposed classification scheme for nonpri-ority unsecured claims under a prospective plan of reorganization for Rexford, and (ii) a determination that its proposed payment under a plan of 100% of certain trade claims — subject to a contractual undertaking to continue providing goods and services on specified terms and conditions— would constitute “impairment” within the, meaning of the Bankruptcy Code. The relief regarding classification is opposed by creditor United States Fidelity & Guaranty Company (“USF & G”). This Memorandum constitutes the Court’s findings of fact and conclusions of law for purposes of Federal Rule of Bankruptcy Procedure 7052.

As explained below, the Court concludes (i) subject to certain modifications, the proposed classification scheme is appropriate and (ii) that the proposed treatment of certain vendor claims constitutes impair *355 ment. But it is critical that the parties understand the limitations of this…