In re Dow Corning Corp.

In re Dow Corning Corp.

Opinion

 [*674] AMENDED OPINION ON GOOD FAITH

The Debtor and the Official Committee of Tort Claimants negotiated and on November 9, 1998 filed a Joint Plan of Reorganization. [**2]  The plan (hereafter referred to simply as the "Plan") was subsequently amended on February 4, 1999 and modified various times. The hearing on confirmation of the Plan commenced on June 28, 1999 and closing arguments were heard on July 30, 1999. Several post-hearing briefs and other submissions were received and the Court took the matter under advisement.

 [*675]  On this date the Court issued its Findings of Fact and Conclusions of Law on the matter of the confirmation of the Plan. This opinion is one of several which will serve to supplement and explicate some of the findings and conclusions. At least one opinion will follow later.

A general overview of the Plan's terms is contained in the opinion on classification and treatment issues. When necessary, additional Plan terms are explained here. Except when otherwise stated, all statutory references are to the Bankruptcy Code, 11 U.S.C. § 101 et seq.

A number of parties objected to confirmation of the Plan on the ground that the Proponents failed to satisfy the requirements of § 1129(a)(3). For the reasons which follow, the Court finds that the Plan was filed in good faith and not by any means forbidden by law.

 [**3]  The Bankruptcy Code does not define the term "good faith." Courts have taken a variety of approaches when applying it. See Tenn-Fla Partners v. First Union National Bank of Florida, 229 B.R. 720, 734 (W.D. Tenn. 1999) (explaining three different approaches). This is not surprising, however, for it is difficult to place precise boundaries around such a fuzzy concept. Laguna Assoc. Ltd. Partnership v. Aetna Cas. & Surety Co. (In re Laguna Assoc. Ltd. Partnership), 30 F.3d 734, 738 (6th Cir. 1994)("Good faith is an amorphous notion, largely defined by factual inquiry." (quoting In re Okoreeh-Baah, 836 F.2d 1030, 1033 (6th Cir. 1988)).

Several courts borrow the concept of good faith from jurisprudence under §§ 362(d)(1) and 1112(b) of the Bankruptcy Code. Those sections focus primarily on the debtor's pre-petition conduct. By the time a case reaches the plan confirmation stage, pre-petition behavior is largely irrelevant. Instead, ] when considering whether a plan satisfies the § 1129(a)(3) requirement, the focus of the court must be on the plan itself. In re Madison Hotel Assoc., 749 F.2d 410, 425 (7th Cir. 1984). This [**4]  issue is whether the plan "will fairly achieve a result consistent with the objectives and purposes of the Bankruptcy Code." Id. See also Hanson v. First Bank of South Dakota, 828 F.2d 1310, 1315 (8th Cir. 1987) (quoting In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 149 (Bankr. S.D. N.Y. 1984)); In re Resorts Int'l, Inc., 145 B.R. 412, 469 (Bankr. D. N.J. 1990); In re Apex Oil Co., 118 B.R. 683, 703 (Bankr. E.D. Mo. 1990); In re White, 41 B.R. 227, 229 (Bankr. M.D. Tenn. 1984); In re Nikron, Inc., 27 B.R. 773, 778 (Bankr. E.D. Mich. 1983) (Brody, J.) ("A plan is proposed in good faith 'when there is a reasonable likelihood that the plan will achieve a result consistent with the objectives and purposes of the Bankruptcy Code.'") (citation omitted).

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