Cornell of California, Inc.

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 06-41626 T
Chapter 11
CORNELL OF CALIFORNIA, NC.,
Debtor.
____________________________/
MEMORANDUM RE CHAPTER 11 PLAN DATED MAY 15, 2007
The Court has reviewed the Debtor’s Chapter 11 Plan, Dated May
15, 	2007. 	It 	has 	concluded 	that 	the 	Plan 	cannot 	be 	confirmed 	and
that, under the facts revealed in the Plan, it is unlikely that the
primary 	obstacle 	to 	confirmation 	is 	capable 	of 	being 	removed. 	The
primary obstacle is that it appears that the Debtor will be unable to
pay the administrative expenses in full. 	A chapter 11 plan may not
be 	confirmed 	unless 	it 	provides 	for 	payment 	in 	full 	of 	the
administrative 	expenses 	on 	the 	effective 	date 	unless 	the 	holder 	of
the 	expense 	agrees 	to 	a 	less 	favorable 	treatment. 	It 	is 	unlikely
that 	the 	Debtor 	will 	be 	able 	to 	obtain 	the 	consent 	of 	the 	various
administrative expense holders to receive nothing under the Plan.
The Plan is also nonconfirmable in that it proposes to pay some
administrative expenses but not others. 	All administrative expenses
Signed: May 14, 2007
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
May 15, 2007
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-41626 Doc# 54 Filed: 05/14/07 Entered: 05/15/07 13:51:17 Page 1 of 3

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have 	an 	equal 	right 	to 	payment. 	If 	a 	pro 	rata 	payment 	were
permissible, this obstacle could be remedied by a modification of the
Plan. 	However, as noted in the preceding paragraph, it is not. 	The
continued 	hearing 	on 	the 	Order 	to 	Show 	Cause 	re 	Conversion 	or
Dismissal is scheduled for June 28, 2007. 	Absent some unanticipated
change 	in 	the 	Debtor’s 	circumstances, 	the 	Court 	contemplates
converting the case to chapter 7 on that date.
END OF DOCUMENT
Case: 06-41626 Doc# 54 Filed: 05/14/07 Entered: 05/15/07 13:51:17 Page 2 of 3

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COURT SERVICE LIST
Lawrence L. Szabo
3608 Grand Ave.
Oakland, CA94610
Case: 06-41626 Doc# 54 Filed: 05/14/07 Entered: 05/15/07 13:51:17 Page 3 of 3