Dark Rhiino Security, Inc.

1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
In re: 	: 	Case No. 24-54658
:
Dark Rhiino Security, Inc., 	: 	Chapter 11
: 	Subchapter V
Debtor. 	: 	Judge Cobb
MEMORANDUM OPINION CONFIRMING FIRST AMENDED PLAN OF
REORGANIZATION OF DARK RHIINO SECURITY, INC.
Subchapter V Debtor In Possession Dark Rhiino Security, Inc. (the “Debtor”) seeks
confirmation of its First Amended Plan of Reorganization (the “Plan”).1 Headquartered in
Dublin, Ohio, the Debtor provides managed cybersecurity services, technology and training to
mid-size businesses and provides internet hosting services to over a hundred customers with
hundreds of thousands of members.2 The Debtor has four shareholders. Two of the shareholders
1 Doc. 108.
2 See Plan at 1.
________________________________________________________________
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: April 13, 2026
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are current employees: Manoj Tandon (“Mr. Tandon”), the Debtor’s Chief Executive Officer, and
Robert T. Smith (“Mr. Smith”), its Chief Technology Officer and President.3 The other two
shareholders were prior employees of the Debtor: Kevin Casey (“Mr. Casey”), the former CEO,
and Anna Day (“Ms. Day”).4 The Plan is non-consensual because impaired classes have not
accepted it.
For the reasons elaborated below, the Plan meets the applicable requirements of the
Bankruptcy Code and will be confirmed. A settlement between the Debtor and Ms. Day was
announced at the confirmation hearing held on February 2, 2026 (the “Confirmation Hearing”),
resulting in her withdrawal of her objection to the Plan,5 and the objections of Mr. Casey6 not
otherwise resolved by agreement on the record are overruled.
I. 	BACKGROUND
A. THE BUSINESS DIVORCE
This case centers around what has been described as a “toxic business divorce.”7 When
this case began, the Debtor asserted that, in addition to the COVID-19 pandemic, its financial
hardship was due to the alleged mismanagement and misconduct of Mr. Casey, whom the Debtor
further alleges misappropriated company funds for personal and lifestyle expenses; incurred debt
without shareholder consent; concealed a romantic relationship with, and made certain payments
to, an employee; and hid from the other shareholders certain lawsuits filed against the Debtor.8
3 See id.
4 See id. at 2.
5 Withdrawal of Objection of Anna Day to Debtor’s First Amended Plan of Reorganization of Dark Rhiino Security,
Inc., Doc. 159.
6 See Docs. 80, 113 &145.
7 The transcript of the Confirmation Hearing (“Feb. Tr.”) is located at Doc. 154. See Feb. Tr. at 11:2.
8 See Declaration of Robert T. Smith in Support of First Day Motions (Doc. 6) ¶ 8.
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The Debtor explained that these allegations precipitated its termination of Mr. Casey in February
2024, prior to the time the Debtor commenced its bankruptcy case.9 These allegations remain
punctuated by the Debtor in its proposed Plan.10 While this Court makes no findings today as to
whether these allegations are true or false, they may explain the Court-perceived animosity
between the Debtor’s current management and Mr. Casey. This in turn, adds context to the
contested matter before it, which centers around the Plan treatment of Mr. Casey, as both a
creditor and interest holder. At the Confirmation Hearing, the Debtor’s counsel continued to
characterize this case as a contentious business divorce among shareholders, but counsel for both
the Debtor and Mr. Casey agreed that all affected parties gave good faith efforts towards
settlement.11
B. THE PROPOSED PLAN
With the parties’ disputes unresolved despite such good faith efforts, the Debtor’s
proposed Plan is a toggle plan, the treatment thereunder dependent upon the outcome of future,
Casey/Day Litigation,12 which the Debtor explains in its Plan would object to the claims of Mr.
Casey and Ms. Day; seek subordination of such claims; and seek recovery on claims against
them, with offset as appropriate. The Plan proposes to pay non-priority, unsecured claims (Class
3) the Debtor’s projected disposable income over three years in the total amount of $241,310.00,
which the Plan explains translates to between approximately 11.7% and 16.1% of Class 3 claims,
depending upon the outcome of the Casey/Day Litigation. To the extent that the Casey/Day
Litigation generates net proceeds, such net proceeds would also be paid to the claimants in this
9 Id. at ¶ 8.
10 See Plan (Doc. 108), at section A, ¶ 3.
11 Feb. Tr. at 5:5–9.
12 Capitalized terms not otherwise defined in this opinion shall have the meaning so ascribed in the Plan.
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class; on the flip side, to the extent such litigation instead results in allowed claims of Casey
and/or Day, the Plan also proposes to reserve sufficient funds to pay them as allowed, Class 3
claimants.13
Separately, the Plan further provides treatment in Class 5 of shareholder interests as
follows:
All shareholders will retain the value of their shares. Mr. Smith and Mr. Tandon will
retain their interests in the Debtor. Under principles of equitable subordination, the
Debtor will acquire the interests of Mr. Casey and Ms. Day by paying to each shareholder
the difference between (a) the value of that shareholder’s shares as determined by a
professional valuation analyst or as agreed to by the parties minus (b) the amount of any
judgment obtained against that shareholder in the Casey/Day Litigation or the amount of
liability agreed to by the parties. Any payments due under this Class 5 will be made over
60 months in quarter annual installments beginning in the quarter following the
completion of payments to Class 3 creditors above. In the event the Debtor collects on
any judgment in excess of the value of shares, i.e., (b) above exceeds (a) above, the
excess will be distributed to Class 3 creditors.14
C. REMAINING OBJECTION TO CONFIRMATION
Mr. Casey initially objected to confirmation of the Plan on several grounds, which can be
summarized as follows: 1) a five-year payment period rather than a three-year period should be
used for all unsecured claims; 2) the Plan fails to articulate how reserves to potentially pay later-
allowed Mr. Casey claims are held and thus may be subject to existing or future liens; 3) the Plan
is unclear as to whether Mr. Casey’s defenses he may raise in a future adversary proceeding are
retained; and 4) Mr. Casey’s equity interest should remain in place absent further order of the
Court and should not be valued by an appraiser chosen by Debtor.15 Except for the first-
13 See Plan, Article 4, 4.01, Classes 3 and 4.
14 Plan, Article 4, 4.01, Class 5. The additional classes in the Plan, Classes 1 and 2, are not the subject to objection
and therefore not summarized here. The Court addresses these classes below when undertaking the Court’s
independent duty to evaluate the Plan for compliance with the Bankruptcy Code.
15 See Docs. 80, 113, 145.
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enumerated objection and a related, factual issue raised as to the projections, all other objections
have been resolved, either through the Plan’s amendment to the Original Plan or through
clarification and agreement confirmed on the record.16
D. THE CONFIRMATION HEARING
The Court conducted the Confirmation Hearing on February 2, 2026, at which arguments
were made and evidence introduced, which is discussed further below. Based on Court inquiry
during the Confirmation Hearing, Mr. Casey requested an opportunity to research and brief
further. After further briefing was filed by Mr. Casey and the Debtor, the Court held a further
hearing on March 3, 2026. The anticipated withdrawal of the objection of Ms. Day and attendant
9019 settlement motion remained outstanding, prompting a further status conference on April 2,
2026. As noted above, the Day objection has now been withdrawn.
II. ANALYSIS
With the above-discussed resolutions and clarifications, the issues before the Court are
streamlined as follows: 1) Casey’s objections contending that the Plan should require a five-year
16 Specifically, as to #2 (the reserves issue), Mr. Casey’s counsel confirms that paying funds into the Subchapter V
Trustee and having him hold those reserve funds until Mr. Casey’s unsecured claim is allowed or disallowed through
the litigation resolves that issue. March Tr. (Doc. 156) at 28:5–9, 22–24. As to #3 (the retained defenses issues), the
Debtor’s counsel confirmed that the Debtor had no intent to strip Mr. Casey of his defenses in connection with the
retained litigation. March Tr. at 29–30:25–16. As to #4, counsel for both parties confirmed that they have an
agreement that the valuation of the shareholder shares would be done by judicial determination or by further
agreement; with this agreement, Mr. Casey further agreed that § 1123(a)(4) is satisfied for purposes of plan
confirmation. March Tr. at 16–17:14–4; 24:17–22 (Mr. Casey’s counsel stating, “if the provision providing that the
valuation is pursuant to an appraiser they select comes out and is replaced by the judicial or agreement of the parties,
we would say that 1123(a)(4) is satisfied for purposes of plan confirmation.”). At the April 2, 2026 status hearing,
the Court invited the parties to submit a stipulation as to these agreed points to streamline the record. As of the date
of this Memorandum Opinion, such stipulation has not been filed but is incorporated into the record if and when
filed.
As to #4, Mr. Casey also raised in his second-filed objection a concern regarding the two remaining shareholders
drawing “significant salaries” while using Debtor assets to fund litigation. See Doc. 113. Even if true, a debtor is
permitted to retain and pursue its litigation causes of action (as are preserved in this Plan); additionally, so long as
the projected disposable income is allocated (as the Plan here does) and provided that the salaries are market-
appropriate (as the record supports), the Debtor may operate in the ordinary course of business, including but not
limited to, making equity distributions or employee payments. 11 U.S.C. § 363(C)(1). See Plan (Doc 108). This
basis to object to confirmation is unsupported by the law or the record and is overruled.
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versus three-year commitment period and raising a factual question of whether the projections
show all disposable income being committed, and 2) this Court’s independent duty to confirm
the Plan’s compliance with the Bankruptcy Code. As discussed below, the Plan meets the
applicable requirements of the Bankruptcy Code, including §§ 1123,17 1190 and 1191(b).18
A. THE COURT’S INDEPENDENT DUTY:
The Court will first address its independent duty to determine that the Plan contains the
provisions set forth in §§ 1123 and 1190 and satisfies § 1191(b).19 The Debtor must demonstrate
compliance with each statutory requirement for confirmation of a Subchapter V Chapter 11 plan
by a preponderance of the evidence. To meet that burden, at the Confirmation Hearing, the
Debtor offered into evidence exhibits and the testimony of Mr. Tandon. Mr. Tandon was cross-
examined by Mr. Casey. Mr. Casey did not move any exhibits into evidence, asking the Court to
instead take judicial notice of the Debtor’s monthly operating reports,20 which the Court takes to
the extent permitted under Federal Rule of Evidence 201(b).
1. PLAN CONTENTS
a. 	§ 1190
The Bankruptcy Code provides that the contents of a Subchapter V plan:
(1) shall include—
(A) a brief history of the business operations of the debtor;
(B) a liquidation analysis; and
(C) projections with respect to the ability of the debtor to make payments under the
proposed plan of reorganization;
(2) shall provide for the submission of all or such portion of the future earnings or other
future income of the debtor to the supervision and control of the trustee as is necessary
17 This excludes § 1123(a)(8) and 1123(c), which are inapplicable in a Subchapter V case pursuant to § 1181(a).
18 As incorporated by reference into § 1191(b), the requirements of § 1129(a), other than paragraphs (8), (10) and
(15), are also met.
19 As incorporated by reference into § 1191(b), the requirements of § 1129(a), other than paragraphs (8), (10) and
(15), must be met.
20 Feb. Tr. at 84:20–25.
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for the execution of the plan; and
(3) [not applicable to this case21].22
Here, the Plan includes a history of the business, a liquidation analysis and cash flow projections;
provides that the Subchapter V Trustee shall be the disbursing agent for Classes 3 and 4 under
the Plan; and, by agreement, requires that funds sufficient to pay Mr. Casey as a Class 3 creditor
will be paid to the Subchapter V Trustee to be held pending a determination of whether his
unsecured claim is allowed or disallowed through the retained litigation.23 Additionally, the
record further supports that the contents of a plan required under Bankruptcy Code § 1123 exist
(with the exception of §§ 1123(a)(8) and 1123(c), which are inapplicable in a Subchapter V case
pursuant to § 1181(a)).24
b. 	§ 1123
As noted, among other things, § 1129(a)(1) requires that the Plan complies with the
applicable provisions of the Bankruptcy Code. This includes compliance with § 1123(a)(4).
Pertinent to an analysis of interest holders in Class 5, § 1123(a)(4) requires a Chapter 11 plan to
“provide the same treatment for each . . . interest of a particular class, unless the holder of a
21 This subsection deals with real property that is the principal residence of the debtor, which is inapplicable here and
therefore not quoted in toto.
22 11 U.S.C. § 1190.
23 See Plan (Doc. 108); see also March Tr. at 28:5-9, 22-24.
24 See generally Plan. The Subchapter V-specific provision, Bankruptcy Code § 1190, is entitled “Contents of plan”,
which is the identical heading ascribed to § 1123. Section 1190 does not reference § 1123 at all; it is silent as to
whether its required contents are in addition to, or in lieu of, the contents required under § 1123. (By contrast,
§ 1191, entitled “Confirmation of plan,” does cross reference and incorporate some, but not all, provisions of
§ 1129(a), which has the identical heading, making it clear what does, and does not apply from the non-Subchapter
V, identically titled provision.) Because § 1190 says a plan “shall include” the history, liquidation analysis, and
projections and provide for the submission of future earnings or other future income without more, one could argue
that these content requirements are an exhaustive list, in place of those set forth in § 1123. On the other hand, § 1181
states that §§ 1123(a)(8) and 1123(c) do not apply in a Subchapter V case, suggesting that the remaining provisions
in § 1123 do. Because the Court finds all provisions of § 1123 (excluding §§ 1123(a)(8) and (c)) are satisfied in this
case, the Court need not resolve this ambiguity today.
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particular . . . interest agrees to a less favorable treatment of such particular . . . interest.”25
Here, the Court concludes that § 1123(a)(4) is satisfied. First, § 1123(a)(4) is satisfied by
agreement: the Debtor and Mr. Casey agree that the valuation of his equity interest will be made
by judicial determination or by further agreement between the parties; with this valuation
process, Mr. Casey further agrees that the Plan can provide for the partial redemption of shares,
such that § 1123(a)(4) is then satisfied for purposes of plan confirmation.26 Even if one were to
conclude that Mr. Casey’s agreement to have his interests redeemed does not satisfy § 1123(a)(4)
due to his remaining objections, the Court concludes that the “same treatment” requirement is
separately satisfied. Courts have clarified that “same treatment” means that “all members of the
class must receive equal value.”27 Aligned with the Quigley equal value requirement, Class 5 is
clear: “All shareholders will retain the value of their shares,” albeit with two shareholders
retaining their shares to receive that value, with Mr. Casey instead receiving that value through
consented-to redemption after an agreed valuation process.28
Based on the record before it, the Court concludes that all other requirements of
§ 1123(a) applicable in a Subchapter V case are also met.
25 11 U.S.C. § 1123(a)(4).
26 March Tr. at 16:21-25, 23:5-13, 24: 17-22.
27 In re Quigley Co., 377 B.R. 110, 116–19 (Bankr. S.D.N.Y. 2007).
28 See Plan, Article 4, 4.01 (emphasis added). The Ninth Circuit Court of Appeals explains the important distinction
between treatment of an interest versus an independent plan impact on the holder of that interest. In re Acequia Inc.,
787 F.2d 1352, 1362-63 (9 th Cir. 1986). There, § 1123(a)(4) was satisfied because the value of the interests was the
same, even though one shareholder lost voting participation rights. The Acequia court focused on the difference
between a shareholder’s position as a director and officer and its position as equity security-holder. Id. Similarly, Mr.
Casey’s potential liability resulting from the Casey/Day Litigation (if any) would be separate from his position as an
equity security-holder retaining the value of his shares. The treatment in Class 5 is the same—all shareholders retain
the value of their interests. That his net recovery after his equally valued interests could be later reduced by offset
due to liability (if any) resulting from the Casey/Day Litigation does not cause the Plan treatment with equally
valued equity interests to be unequal. This Court need not form an opinion as to whether, absent Mr. Casey’s
agreement to share redemption with an agreed valuation process, a plan that requires redemption of some, but not all
shares, provides the “same” treatment for each interest to satisfy § 1123(a)(4).
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2. NON-CONSENSUAL PLAN UNDER § 1191(B)
Where, as here, a Subchapter V proposed plan is non-consensual, Bankruptcy Code
§ 1191(b) applies, which in turn incorporates by reference the requirements of § 1129(a), except
paragraphs (8), (10), and (15). If these § 1129(a) requirements are satisfied, then this Court “shall
confirm the [P]lan notwithstanding the requirements of [paragraphs (8), (10), and (15)] if the
[P]lan does not discriminate unfairly, and is fair and equitable, with respect to each class of
claims or interests that is impaired under, and has not accepted, the [P]lan.”29
a. 	§ 1129(a) Requirements Satisfied
This Court first finds that the applicable requirements of § 1129(a) incorporated into
§ 1191(b) are satisfied as follows:
• 	§ 1129(a)(1) and (2) requires that the Plan and plan proponents comply with the
applicable provisions of the Bankruptcy Code. They do.30 Above, the Court
elaborates on compliance with § 1123(a)(4) in particular.
• 	§ 1129(a)(3) dictates that this Court find that the Plan was proposed in good faith
and not by any means forbidden by law. No filed objection disputes this finding.
Mr. Tandon testified to the Debtor’s good faith in proposing the Plan, and the
Court found his testimony credible and unchallenged on this point.31
• 	§ 1129(a)(4) requires that any payments made or to be made by the Debtor or the
Estate for costs and expenses in connection with the case be approved as
reasonable. The Plan is supported by projections, which Mr. Tandon testified
were conservative.32 For any fees and costs that must be Court approved, this
Court will not approve any fees or expenses that are unreasonable. The Plan thus
complies with §1129(a)(4).
• 	§ 1129(a)(5) requires the Debtor to disclose the identify and affiliations of
29 11 U.S.C. § 1191(b).
30 11 U.S.C. § 1123. This excludes § 1123(a)(8) and 1123(c), which are inapplicable in a Subchapter V case pursuant
to § 1181(a).
31 Feb. Tr. at 86:11-13
32 Id. at 78:25-79:1.
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anyone proposed to serve post-confirmation as director or officer, as well as the
nature of any insider compensation. The Plan does this as well.
• 	§ 1129(a)(6) is inapplicable because there is no regulatory or rate change
involved.
• 	§ 1129(a)(7) requires that the Debtor shows each holder of an impaired claim or
interest has either “accepted the plan” or would receive under the Plan, value that
is not less than the amount they would receive in a hypothetical Chapter 7. The
record shows that this “best interests of creditors” test is satisfied.33
• 	§§ 1129(a)(8) and (10) are not satisfied but the Plan may still be confirmed as a
non-consensual plan under § 1191(b).
• 	§ 1129(a)(9) provides for payment of priority claims on the effective date of the
plan “[e]xcept to the extent that the holder of a particular claim has agreed to a
different treatment of such claim.”34 Articles 3 and 4 of the Plan provide for
payment of administrative and priority claims on the later of the Effective Date of
the Plan or the date on which such a claim is allowed. No claimant objected to
this, so the treatment is agreed to by any such affected claimant.35
• 	§ 1129(a)(11) requires a finding that confirmation of the Plan “is not likely to be
followed by the liquidation, or the need for further financial reorganization, of the
[D]ebtor or any successor to the [D]ebtor under the [P]lan.”36 The Court makes
this finding. Among other facts in the record, Mr. Tandon testified that for the
first time, the Debtor was cash flow positive and paid taxes in 2025 and appears
to have a significant tax bill this year due to making a profit.37 The Debtor has
added nine new clients despite a miniscule marketing budget.38
• 	§ 1129(a)(12) is satisfied because “[t]here are no statutory fees required to be
33 See Plan Ex. A; see also Certification of Acceptances and Rejections of Proposed Plan of Reorganization (Doc.
81); Feb. Tr. at 30:9-15.
34 11 U.S.C. § 1129(a)(9).
35 See In re EAS Graceland, LLC, No. 20-24484, 2021 WL 10395821, at *6 (Bankr. W.D. Tenn. July 20, 2021)
(“Here, no objection to designation of a claim or interest was asserted by any party-in-interest under 11 U.S.C.
§ 1129(a)(9). . . . The Court therefore concludes that Debtor has demonstrated by a preponderance of the evidence
that the Plan complies with § 1129(a)(9).”).
36 11 U.S.C. § 1129(a)(11).
37 Feb. Tr. at 21:8–19.
38 Id. at 21:24-22:6–7.
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paid under 28 U.S.C. § 1930 that are owed on or before the Effective Date of this
Plan.”39
• 	§§ 1129(a)(13) (retiree benefits), (14) (domestic support), (15)40 (for individual
debtors), and (16) (transfers by a nonprofit entity) are inapplicable by their terms.
b. 	Cramdown Analysis
With the § 1129(a) requirements in § 1191(b) satisfied, the Court turns to the cramdown
analysis as to the impaired classes that also rejected the Plan. As noted, even if a class of claims
or interests is impaired and rejects a plan, the Court shall still confirm the Plan provided that it
“does not discriminate unfairly, and is fair and equitable, with respect to each [such] class of
claims or interests.”41
i. 	Unfair Discrimination Standard
“Unfair discrimination” under § 1191(b) is not defined in the Bankruptcy Code, but this
requirement mirrors that in § 1129(b)(1). The Third Circuit Court of Appeals in the Tribune
bankruptcy case recently refined the interpretation of unfair discrimination in the Chapter 11
context: “‘[D]iscriminate unfairly’ is a horizontal comparative assessment applied to similarly
situated creditors . . . where a subset of those creditors is classified separately, does not accept
the plan, and claims inequitable treatment under it.’”42
ii. 	Fair and Equitable Requirements
For the “fair and equitable” analysis, Subchapter V does replace the rule of construction
39 Plan at 6.
40 Section 1129(a)(15) is also an inapplicable provision in a Subchapter V pursuant to § 1181(a).
41 11 U.S.C. § 1191(b).
42 In re Tribune Co., 972 F.3d 228, 232 (3d Cir. 2020); see also In re Murray Metallurgical Coal Holdings, LLC, 623
B.R. 444, 520 (Bankr. S.D. Ohio 2021) (“Unfair discrimination is rough justice. It exemplifies the Code’s tendency
to replace stringent requirements with more flexible tests that increase the likelihood that a plan can be negotiated
and confirmed.’”) (quoting Tribune, 972 F.3d at 245).
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in § 1129(b)(2) with a new rule of construction, § 1191(c), which enumerates requirements that
are “include[d]” in the condition that a plan is “fair and equitable,” such as a requirement for
secured claims; the application of all of the projected disposable income during the plan period is
applied to plan payments, or the value of the property to be distributed over the plan term is not
less than such projected disposable income; and a finding that the debtor will be able to make the
plan payments, or is reasonably likely to make all plan payments (with corresponding remedies
for nonpayment).43
iii. Non-Casey Classes 1 and 2
Class 1 is unimpaired, meaning that this Court need not analyze the unfair discrimination
and fair and equitable tests as to it. Class 2 is impaired and deemed to reject, although no
objections were filed as to Class 2. The Court has considered the Plan and the record to
independently conclude that Class 2 does not discriminate unfairly and is fair and equitable. This
leaves us with Classes 3, 4, and 5.
iv. Mr. Casey: Classes 3, 4, and 5
Mr. Casey wears a few proverbial “hats” in this case: a Class 3 creditor to the extent that
his claims are allowed in the Casey/Day Litigation;44 a Class 4 creditor to the extent his claims
are subordinated or otherwise offset by virtue of the Casey/Day Litigation; and a Class 5 equity
interest holder.
As noted, Mr. Casey’s only remaining objection to confirmation of the Plan is that the
43 See 11 U.S.C. § 1191(c). Notably, § 1129(b)—and its differently enumerated requirements included to make a
plan fair and equitable—expressly does not apply in Subchapter V cases. See 11 U.S.C. § 1181(a).
44 The Plan defines Class 3 as a class with “[h]olders of all allowed claims that are not entitled to priority and not
included in Class 2 or 4,” adding that there could be distributions under Class 3 to Mr. Casey (and Ms. Day)
“depending on the outcome of the Casey/Day Litigation.” Plan at 8. Class 4 also qualifies treatment of its members,
if any, upon the outcome of the Casey/Day Litigation. See id. In other words, the Plan tells Mr. Casey (and Ms. Day)
that they are either in Class 3 or Class 4, depending upon the outcome of yet-to-be filed Casey/Day Litigation.
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Plan should impose a five-year, rather than a three-year, commitment period (with a related fact
issue as to the projections), arguing that this is required to satisfy the fair and equitable standard.
No objection on the basis of unfair discrimination was made, and, applying a horizontal
assessment, the Court finds that there is no unfair discrimination. The Court will evaluate Mr.
Casey’s fair and equitable objection in the context of each of his pecuniary interests in this case.
aa. Class 3 Accepted the Plan.
The toggle structure of the Plan contemplates Mr. Casey as either a Class 3 or Class 4
creditor, depending upon the outcome of the Casey/Day Litigation. Therefore, to the extent Mr.
Casey is a Class 3 creditor, he is part of a class that has accepted the Plan.45 Because Class 3 has
accepted the Plan, the cramdown analysis under § 1191(b) does not apply to it.46 Instead, where,
as here, there is a dissenting creditor (Casey) in an accepting class (Class 3), the dissenting
creditor is only protected by the “best interests of creditors test,” and that test is satisfied.47
bb. Class 4 Members Lack Standing to Object to Commitment Period.
As a Class 4 creditor, Mr. Casey lacks standing to raise a commitment period objection
because the length of the commitment period does not affect a Class 4 member’s direct interests.
45 Mr. Casey did not submit a ballot as a Class 3 member. See Mr. Casey’s ballot attached to the Stipulation
Regarding Plan Ballot (Doc. 149). Had Mr. Casey also submitted a ballot as a Class 3 member, it appears that, given
the $270,865.86 combined total of his Proofs of Claim, Class 3 would have rejected the Plan, which in turn, would
have triggered the § 1191(b) cramdown analysis as to Class 3 (versus as to Classes 4 or 5). See Certification of
Acceptances and Rejections of Proposed Plan of Reorganization (Doc. 81) at 1; see also Claims Register, Claim
Nos. 2-1, 3-1, and 4-1. However, as discussed below, even had Mr. Casey so voted, the record supports a finding that
Class 3 satisfies the cramdown requirements in any event.
46 See In re Robinson, 632 B.R. 208, 220 (Bankr. D. Kan. 2021) (“[A]ll impaired classes have accepted the plan,
thereby avoiding confirmation as a nonconsensual plan under § 1191(b).”).
47 In re Aegerion Pharms., Inc., 605 B.R. 22, 32–33 (Bankr. S.D.N.Y. 2019) (cleaned up). See also id. at 29
(“[T]hose requirements [that the plan does not discriminate unfairly and be fair and equitable] only apply to
creditors in a rejecting class. Dissenting creditors in an accepting class are only protected by section 1129(a)(7)—the
best interests test—which requires that dissenting creditors receive at least as much as they would in a Chapter 7
liquidation.”). This § 1129(b) analysis applies with equal force to § 1191(b), given that it has the same “with respect
to each class of claims or interests that is impaired under, and has not accepted, the plan” language that is found in
§ 1129(b).
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Section 1109(b) of the Bankruptcy Code provides that “[a] party in interest, including . . . a
creditor, . . . may raise and may appear and be heard on any issue in a case under this chapter.”48
“Although the definition of ‘party in interest’ is broad, it is not limitless. ‘[T]he case law on
party-in-interest standing under § 1109(b) limits an objector to asserting its own rights—it may
not assert the rights of others.’”49 In the confirmation context, this has been construed to mean
that one class of creditors lacks standing to assert the rights of another class under a plan or to
otherwise challenge plan provisions that do not directly and negatively affect their pecuniary
interests.50
Wearing his hat as a Class 4 creditor, Mr. Casey lacks standing to object because his
direct interest remains the same under either commitment period. Whether the commitment
period is three or five years, Class 3 creditors would not be paid in full; in turn, under either
48 11 U.S.C. § 1109(b).
49 In re The Roman Catholic Church of the Archdiocese of New Orleans, No. 20-10846, 2026 WL 688166, at *11
(Bankr. E.D. La. Mar. 10, 2026) (quoting In re AIO US, Inc., 672 B.R. 261, 274 (Bankr. D. Del. 2025)).
50 See In re Genesis Glob. Holdco, LLC, 660 B.R. 439, 498 n.58 (Bankr. S.D.N.Y. 2024). In support of this
restriction on standing, the Genesis court cited and summarized numerous cases as follows:
EFL Ltd. v. Miramar Res., Inc. (In re Tascosa Petrol. Corp.), 196 B.R. 856, 863 (Bankr. D. Kan. 1996) (stating
that prudential standing limitations prevented a Class 5 creditor from challenging portions of a reorganization
plan that did not affect its direct interests and from asserting the rights of a Class 4 under the plan); In re Evans
Prods. Co., 65 B.R. 870, 874 (S.D. Fla. 1986) (debtors “have standing only to challenge those parts of a
reorganization plan that affects their direct interests” and lack standing “to raise the rights of wrongly classified
creditors as a means to attack the overall reorganization plan” that had been proposed by a lender); In re
Simplot, 2007 WL 2479664, at *10 (Bankr. D. Idaho Aug. 28, 2007) (stating that “parties may not assert
confirmation objections that relate solely to others, or that go to issues that do not directly and adversely affect
them pecuniarily” and limiting standing of entity in which debtor owned stock to specific plan confirmation
issues, while rejecting standing to raise others); In re Orlando Inv., L.P., 103 B.R. 593, 596–97 (Bankr. E.D. Pa.
1989) (objectors could not challenge plan releases that only affected other interest holders, stating that “it is
difficult to see how the rights of the objectors have been adversely affected by the inequality of treatment
proposed by th[e] plan, and difficult to accord them standing to raise this issue.”); In re Johns-Manville Corp.,
68 B.R. 618, 623 (Bankr. S.D.N.Y. 1986) (“[N]o party may successfully prevent the confirmation of a plan by
raising the rights of third parties who do not object to confirmation.”), aff'd, 78 B.R. 407 (S.D.N.Y. 1987), aff'd
sub nom. Kane v. Johns–Manville Corp. (In re Johns–Manville Corp.), 843 F.2d 636, 644 (2d Cir. 1988).
Id. See also In re Cypresswood Land Partners, I, 409 B.R. 396, 418 (Bankr. S.D. Tex. 2009) (holding that “[c]ourts
across the nation have determined that parties-in-interest may only object to plan provisions that ‘directly implicate
its own rights and interests.’” (quoting In re Quigley Co., 391 B.R. 695, 705 (Bankr. S.D.N.Y. 2008)) (discussing
supporting case law).
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commitment period, Class 4 members—paid, if at all, after Class 3 is paid in full—recover zero.
cc. Class 5 Treatment by Agreement and No Standing
Mr. Casey has agreed to the treatment of his equity interest in Class 5, i.e. valuation of his
shares coupled with Debtor’s share redemption, subject to the outcome of the Casey/Day
Litigation.51 Further, even if his objection to the commitment period is asserted by him in his
capacity as a Class 5 equity holder notwithstanding this, as is true as a Class 4 member, he would
suffer no pecuniary harm from a three versus five-year commitment period; he therefore does not
have standing as a Class 5 member on this issue.52
B. THREE-YEAR COMMITMENT PERIOD IS FAIR AND EQUITABLE IN ANY
EVENT
Even were this Court to assume, arguendo, that it would be appropriate to conduct a
cramdown analysis as to Class 3 (or to assume that despite the lack of negative pecuniary impact,
Mr. Casey still has standing as a Class 4 or 5 member to trigger a cramdown analysis), the record
in this case supports a finding that the three-year commitment period is fair and equitable
anyway.
This Court agrees with the Trinity court that it has “broad discretion” in deciding whether
to require a debtor to commit all of its projected disposable income for a longer period than three
years and that it should consider the “totality of the circumstances” of the case when exercising
this broad discretion.53
51 See supra, footnote 16. Of note, the Ballot for Accepting or Rejecting Plan of Reorganization utilized in this case
did not include Class 5 among the creditors or equity interests entitled to vote. See Doc. 54, Ex. A. Arguably, absent
agreement, Class 5 is impaired, and interest holders should have been entitled to vote. Given the parties’ agreement
as to Class 5 treatment and the absence of objection on this basis, this is harmless error.
52 If anything, it appears that Mr. Casey would suffer a worse pecuniary impact as an equity holder with a five versus
three-year commitment period because cash flow that would otherwise be unrestricted after year three would instead
become restricted due to its allocation to creditors for a longer period, which in turn, negatively affects the value of
the Debtor’s equity, at least under a discounted cash flow analysis.
53 In re Trinity Family Practice & Urgent Care PLLC, 661 B.R. 793, 821 (Bankr. W.D. Tex. 2024).
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The Trinity court further concluded a debtor’s choice of repayment period should be
given deference only if there is no objection to the repayment period, but that where, as here,
there are objections, the debtor has the burden of proof on the issue of whether the repayment
period is fair and equitable.54 This Court disagrees. The statute itself defaults to a three-year
period unless the court—exercising discretion—fixes otherwise; the statute does not say that if
faced with objection, the debtor then must demonstrate that three years is fair and equitable.
Importantly, when exercising its discretion, the Court must be mindful of separate
findings under § 1191(c) that it must make to conclude that treatment is fair and equitable.
Specifically, the Court must also find that the Debtor “will be able to make all payments under
the plan” or that “there is a reasonable likelihood that the [D]ebtor will be able to make the
payments,” in which case, the Court must further find that the Plan “provides appropriate
remedies . . . in the event that the payments are not made.”55
The record in this case makes the Court reticent to find that there is a reasonable
likelihood that the Debtor will be able to make the payments beyond three years. To the contrary,
the record reflects a real risk that once the existing contract periods (some of which expire in
three years) and other developments by the government and/or Project Management Institute
(“PMI”) occur, the Debtor’s business could constrict, which in turn, suggests a reasonable
likelihood that the Debtor cannot make plan payments to unsecureds beyond three years.
Specifically, Mr. Tandon explained that one of their business lines—providing hosting services to
the PMI chapters globally—“has been changing,” with PMI discouraging chapters from
renewing contracts with Debtor (possibly to provide such services to its members for free itself),
54 Id. at 821–22.
55 11 U.S.C. § 1191(c)(3).
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which makes it difficult to project out beyond the currently known, three-year contract terms and
which could cause a shortfall of “about a half a million dollars.”56 Mr. Tandon further explained
that “[i]n [Debtor’s] business, three years is like 30 in somebody else’s” adding that in addition
to the PMI uncertainty, their “federal government clients . . . have decided to shift away from a
technology . . . that [Debtor] support[s],” the revenue from which Debtor knows “is going to go
away,” albeit taking “a couple of years.”57 Together, these uncertainties make a three-year period
“less risky” and more supported by what is known currently.58 Considering the record, the Court
cannot make a finding that the Debtor has a reasonable likelihood to be able to make payments
over a five-year (or longer than a three-year) period. Unable to make such a finding, the Court
must decline to exercise discretion to diverge from (and decide to default to) a three-year
commitment period.59
This should end the inquiry. However, even were the Debtor to bear a burden to defend a
three-year period, applying the Trinity factors—which are neither exhaustive nor dispositive—
the record still supports a finding that the three-year commitment period is fair and equitable
sufficient to satisfy that burden.60
56 Feb. Tr. at 23:17–18; 24:24.
57 Id. at 78:4–20.
58 Id. at 79.
59 Although not part of the record and not the basis for the Court’s ruling, it is interesting to note that the three-year
statutory default and the record here are also aligned with the statistics highlighted in the House Report for Congress
to pass the Small Business Reorganization Act of 2019 (with its goal of making it easier for small businesses to
reorganize): “According to the Small Business Administration Office of Advocacy, approximately 20 percent of
small businesses survive the first year, but by the five-year mark only 50 percent are still in business and by the ten-
year mark only one-third survive.” H.R. Rep. No. 116-171 (2019), reprinted in 2019 U.S.C.C.A.N 366, 367; see also
In re Urgent Care Physicians, Ltd., No. 21-24000-BEH, 2021 WL 6090985, at *10 (Bankr. E.D. Wis. Dec. 20, 2021)
(“Congress’s recognition that small businesses typically have shorter life-spans than large businesses suggests that a
plan term of three years is more reasonable, generally speaking (or as a default), than a five-year term, absent
unusual circumstances.”)
60 The Trinity factors are as follows:
i. Capital reserves or capital expenditures during the period of plan payments;
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First, as highlighted by the Subchapter V Trustee at the Confirmation Hearing and as
supported by the testimony and exhibits, the Plan stretches out payments to the secured creditor
over ten years, which in turn, benefits the unsecured creditors by freeing up more projected
disposable income; “[i]f [Debtor] had crammed the SBA into a three or five-year payment term,
that would have significantly reduced what was available to unsecured creditors.”61 And all
proceeds (if any) from the retained litigation would go to the unsecureds in addition to the
projected disposable income.62
Here, there are no capital reserves. But the Debtor is keeping $75,000 of cash in reserve
during the three-year plan, while making payments to unsecured creditors of at least
$241,310.63 Mr. Casey contends that it is unclear whether the reserves are high enough for the
maintenance of the Debtor’s computers and other capital equipment.64 The Debtor adduced
testimony explaining the basis for, and reasonableness of, these projections. Mr. Tandon testified
that the Debtor “[does not] have any capital equipment per se . . ., other than laptops or things of
that [sort], but what [the reserve] provides for is a reserve to not cash starve the business at least
ii. Reasonableness of income and expenses set forth in the plan projections during the period of plan
payments as compared to historical operations and operations during the post-petition, pre-confirmation
time period;
iii. Salary and/or other payments to insiders during the period of plan payments;
iv. Risks and consequences of a longer period of plan payments; and
v. Any other unique or extraordinary facts specific to the case.
Trinity, 661 B.R. at 822–23 (cleaned up).
61 Feb. Tr. at 90:21–24;
62 Id. at 14:10-16.
63 See Plan at 7; Exhibit B (Projected Disposable Income).
64 See First Casey Obj. (Doc. 80) at 3.
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a month of salaries,” to protect from a “very real scenario” of a customer delaying payment.65
This evidence supports the basis for and reasonableness of the Debtor’s cash in reserve.
Salaries are reasonable—if not below market. Mr. Tandon testified that the salaries
(including intended increases) are “very fair” and “low compared to market rate” and that
previously intended pay increases had not been taken to ensure that the company does not impact
cash flow, which is “everything for [Debtor].”66
The cash flow projections are reasonable compared to historical performance coupled
with developments in the marketplace, as explained by Mr. Tandon.67
As highlighted above, there are substantiated risks that PMI business may disappear after
existing three-year contracts, with other government/security business potentially lost over a
finite time as well. These risks support a three-year plan period.68
In short, the Trinity non-exhaustive factors and the totality of the circumstances in this
record show that any Debtor-burden in defense of a three-year commitment period is satisfied.
Lastly, the record supports a finding that there is a “reasonable likelihood that the
[D]ebtor will be able to make all payments under the[P]lan,” and that the Plan “provides
appropriate remedies . . . to protect the holders of claims or interests in the event that the
payment are not made.”69 As discussed above, Mr. Tandon explained that there are three-year
terms to existing PMI contracts as well as likely years delay to the risk of future loss to the
65 Feb. Tr. at 29:4–24. In Trinity, the complaint regarding the reserves was the opposite, i.e. that the reserve at
$31,816.05 was too high when the distribution to unsecured creditors over the three-year term of the plan was only
$38,816.05. There, the Court found insufficient evidence to support the reserves. Trinity, 661 B.R. at 823.
66 Feb. Tr. at 22:20–24.
67 See Feb. Tr. at 78:25–79:1. Mr. Casey does not appear to raise an issue with the Debtor’s projections of operating
expenses, but only its projections of revenue. See First Casey Obj. at 3.
68 See Trinity, 661 B.R. at 825-826 (“The bankruptcy court should also consider any other facts that suggest that a
longer period of plan payments increases the risk of the business failing.”)
69 11 U.S.C. § 1191(c)(3)(B).
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government business, meaning that projections informed by historical performance would
remain supportable at least for that shorter period.70 And, the Plan spells out remedies in the
event of nonpayment sufficient to satisfy § 1191(c).71
III. CONCLUSION
For the foregoing reasons and as supported by the record, the Court will enter a separate
order confirming the Plan.
70 Feb. Tr. at 23:17–18; 24:24; 78:4–20.
71 See Plan, Article 9, ¶¶ 1-4.
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