A single-asset real estate Chapter 11 case lets a CRE borrower buy time to negotiate a workout, propose a cramdown plan over the lender's objection, or sell the property under section 363. On a single-asset real estate case, the lender can seek stay relief unless, within 90 days, the debtor either files a plan with a reasonable possibility of confirmation or commences monthly adequate-protection payments. It is either/or.
What is a cramdown plan?
A reorganization plan confirmed over the lender's objection if it satisfies the absolute priority rule and pays the secured creditor present value of its allowed claim. Cramdown is most often used to bifurcate debt into a secured portion (current value) and an unsecured deficiency that may be discharged.
When does it work?
When the alternative (foreclosure or accepting the lender's terms) would wipe out sponsor equity or value the lender could otherwise capture. Bankruptcy is expensive ($500,000 to $3,000,000 in legal cost on a typical case) and adversarial, it should be a tool of last resort but is occasionally the right answer.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1