River East Plaza, Ll v. Lnv Corpora, 669 F.3d 826

River East Plaza, LLC filed Chapter 11 for a single-asset real estate (SARE) case involving a Chicago building with LNV Corporation holding the first mortgage.
Automatic stay under 11 U.S.C. § 362(a)(4) halted a scheduled state-court foreclosure sale that was imminent on the building.
LNV elected to participate in the bankruptcy to lift the stay and potentially modify its lien through a plan.
River East proposed substitution of collateral (30-year Treasury bonds) to retain its plan while eroding LNV’s lien, claiming indubitable equivalence under 11 U.S.C. § 1111(b) and § 1129.
LNV elected to exchange its undersecured claim (valued at $38.3M against $13.5M in collateral) for a larger secured claim, eliminating an unsecured deficiency.
The bankruptcy judge rejected River East’s substitution plan, lifted the stay, and, after dismissal of the Chapter 11, River East appealed directly to the Seventh Circuit.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Can substitute collateral satisfy indubitable equivalence under §1111(b)(3) cramdown?	River East argues substitute collateral is the indubitable equivalent of the building.	LNV contends substituted collateral is not the indubitable equivalent and fails to preserve its secured position.	No; substitution not indubitable; River East cannot confirm under §1111(b)(3).
Is River East's plan feasible under the 90-day cramdown deadline and §362(d)(3) in a SARE case?	River East contends deadlines were not properly triggered and plan could be confirmed.	LNV argues the deadlines and procedures were satisfied and dismissal appropriate.	The plan was not viable; the district court acted within discretion to dismiss.
May a debtor substitute collateral to evade a secured creditor’s credit bid rights under §1129(b)(2)(A)?	River East contends substitution preserves value and avoids credit bid restrictions.	LNV argues substitution thwarts the creditor’s right to bid and value capture.	River Road prohibits end runs; substitution cannot undermine creditor protections.
Was dismissal of the Chapter 11 appropriate after rejection of River East’s plans and expiration of the 90-day deadline?	River East argues some plan could still be confirmable.	LNV seeks finality; the proceeding had become untenable and would likely fail.	Yes; dismissal affirmed and stay vacated.

In re Penrod, 50 F.3d 459 (7th Cir. 1995) (creditor may bypass bankruptcy to pursue state remedies but may be bound by stay if party participates)
In re Airadigm Communications, Inc., 519 F.3d 640 (7th Cir. 2008) (participating creditor subject to plan with potential lien modification)
FDIC v. Meyer, 781 F.2d 1260 (7th Cir. 1984) (creditor may credit bid at auction to satisfy debt)
In re Sun Country Development, Inc., 764 F.2d 406 (5th Cir. 1985) (substitution of collateral under §1111(b) must be equivalent)
In re Philadelphia Newspapers, LLC, 599 F.3d 298 (3d Cir. 2010) (indubitable equivalent analysis for cramdown under §1129(b)(2)(A))
In re Murel Holding Corp., 75 F.2d 941 (2d Cir. 1935) (early view on lien treatment and substitution issues)
In re Pacific Lumber Co., 584 F.3d 229 (5th Cir. 2009) (application of indubitable equivalence in substitutions)
River Road Hotel Partners, LLC v. Amalgamated Bank, 651 F.3d 642 (7th Cir. 2011) (addressed indubitable equivalence and credit bid protections in cramdown (RadLAX context))
Olive Can Co. v. Martin, 906 F.2d 1147 (7th Cir. 1990) (considerations of debt and collateral differences in cramdown)
In re James Wilson Associates, 965 F.2d 160 (7th Cir. 1992) (principles on substitution of collateral and creditor protection)