III.   The Path Forward

            In addition to the confusion regarding how a court should decide the issues of both policy and statutory construction, there remains the question of how these areas should be weighted if they result in different conclusions. This section will first look at how the courts should address the two main issues. Then this section will address the weighting of the two issues in instances that would result in different conclusions.

A.   The Policy and The Statute, Revisited

            While the courts have had trouble agreeing on the final solution to the questions of both policy and statutory construction,[1]the answer to each is more straightforward than the courts are willing to admit. The question of policy favors exclusion of secured tax claims from the status of a voting class. Not only does a secured tax claimant have preferential treatment,[2]but also it is guaranteed a minimum amount by statute.[3]This results in a reduced incentive to act objective while voting on the plan confirmation.

            The question of statutory construction is less clear. Valid arguments for and against a given interpretation of the statutory language exist and have been used by the courts.[4]However, by looking at the question through the lens of Congress’s intent, while a full analysis is beyond the scope of this paper, does shed some light on how the statute should be interpreted. Once viewed through this lens, the question becomes much less difficult. While viewing it through Congressional intent turns this partially into a question of policy, one cannot completely divorce statutory interpretation and policy. Similar to the issue of pure policy, the issue of statutory interpretation again favors the exclusion of secured tax claims from the status of a voting class. While arguments can be made for inclusion, it is only done so by ignoring what Congress intended. If Congress had wanted the same uniform treatment for both secured and unsecured claims, it would have drafted the sections to incorporate all the possible preferences. Instead, class treatment was intentionally excluded, and should be excluded by the courts.

B.   Weighting

            While weighting has been an issue, it was only an artificial issue because of the different conclusions reached by the courts with regards to the questions of policy and statutory interpretation. With both questions resulting in the same conclusion now, exclusion of secured tax claims from the status of a voting class, the weight of each becomes irrelevant. Regardless of which issue the court analyzes first, and cares more about, the end result will be the same.


            As the courts continue to argue over whether secured tax claims should have the rights of a voting class, uncertainty in bankruptcy planning persists.[5]Should a planner court the votes of a secured tax claim class? Or would that time be better spent elsewhere? The courts have focused on two main areas of contention, how the public policy of a reorganization dictates whether a secured tax claim should have a voting class,[6]and whether the statutory language suggests the same.[7]Looking at both issues as a whole leads to a consistent answer that excludes secured tax claims from being a voting class.[8]

[1]           See discussion supra Part II.

[2]           11 U.S.C. 1129(a)(9)(D).

[3]           § 1129(a)(9)(B).

[4]           See discussion supra Part II.

[5]           See discussion supra Part I.

[6]           See discussion supra Part II.A.

[7]           See discussion supra Part II.B.

[8]           See discussion supra Part III.