IN RE ASC, INCORPORATED (Bankr.E.D.Mich. 9-4-2007)

THOMAS TUCKER, Bankruptcy Judge

On August 30, 2007, Debtor filed a plan and disclosure statement, in a document entitled "The Debtor's Combined Plan of Reorganization and Disclosure Statement." (Docket # 570.) The Court cannot yet grant preliminary approval of the disclosure statement contained within this document ("Disclosure Statement"). The Court notes the following problems, which Debtor must correct.

First, Article III, Paragraph 3.3 on page 16 of the Plan creates Class III claims, consisting of "Allowed Claims that are entitled to priority under § 507(a)(8) of the Code." "[P]riority tax claims . . . are not supposed to be classified in a Chapter 11 plan for voting or other purposes." In re Northwest Timberline Enterprises, Inc., 348 B.R. 412, 422 (Bankr. N.D. Tex. 2006) (citing 11 U.S.C. §§ 1123(a)(1)). Debtor must amend the Plan so that the § 507(a)(8) claims are not included in a class under Article III. Rather, such claims should be included as a group ( e.g., as "Group 2") in Article II of the Plan. With the § 507(a)(8) claims excluded from Article III, all claims classified in Article III are impaired. The Caption for Article III should thus state: "Specification of Treatment of Classes of Claims Or Interests Impaired Under the Plan."

Second, neither the Plan nor the Disclosure Statement states the amount of Administrative Claims. Debtor must amend Article III, Paragraph 2.1 of the Plan and the Disclosure Statement to state at least estimated amounts for all Administrative Claims. Debtor must also amend the Disclosure Statement so that the total amount of estimated Administrative Claims are listed in the Liquidation Analysis.

Third, neither the Plan nor the Disclosure Statement states the amount of the "Secured Claim of Holdings." Debtor must amend Article III, Paragraph 3.2.1 of the Plan and the Disclosure Statement to state what Holdings alleges is the amount of its Secured Claim, and what Debtor alleges is the amount amount of Holdings' Secured Claim. Debtor must also amend the Disclosure Statement so that the amount of Holdings' Secured Claim is listed in the Liquidation Analysis.

Fourth, Debtor must amend Paragraph VII.C on page 48 of the Disclosure Statement, describing "Confirmation," so that it states verbatim the language required in Paragraph VI.C of the "Requirements For Information To Include In the Combined Plan and Disclosure Statement (Judge Tucker), which can be found at http://www.mieb.uscourts.gov/forms/plan_tucker.pdf. on the Court's website. That language is as follows:

11 U.S.C. § 1129(a) establishes conditions for the confirmation of a plan. These conditions are too numerous and detailed to be fully explained here. Parties are encouraged to seek independent legal counsel to answer any questions concerning the Chapter 11 process.

Among the several conditions for confirmation of a plan under 11 U.S.C. § 1129(a) are these:

1. Each class of impaired creditors and interest must accept the plan, as described in paragraph VI.B., above.

2. Either each holder of a claim or interest in a class must accept the plan, or the plan must provide at least as much value as would be received upon liquidation under Chapter 7 of the Bankruptcy Code.

Fifth, Debtor must amend the Plan so that it explicitly includes a treatment of the equity interests of Debtor. Unless otherwise provided in the plan or in an order confirming a Chapter 11 plan, the general rule is that the confirmation of a plan "terminates all rights and interests of equity security holders . . . provided for by the plan." 11 U.S.C. § 1141(d)(1)(B). The Plan must indicate who will own the reorganized Debtor ( e.g., Debtor must state whether American Specialty Cars Holdings, L.L.C. will retain its ownership interest in the reorganized Debtor).

Accordingly,

IT IS ORDERED that Debtor must file, no later than September 19, 2007, an amended combined plan and disclosure statement which corrects the above stated problems.

IT IS FURTHER ORDERED that Debtor also must provide to Judge's chambers, no later than September 19, 2007, a redlined version of the amended combined plan and disclosure statement, showing the changes Debtor has made to "The Debtor's Combined Plan of Reorganization and Disclosure Statement" (Docket # 570) filed August 30, 2007. Debtor must submit this redlined document to chambers electronically, through the Court's order submission program.