"For example, the coerced loan approach requires bankruptcy courts to consider evidence about the market for comparable loans to similar (though nonbankrupt) debtors, an inquiry far removed from such courts’ usual task of evaluating debtors’ financial circumstances and the feasibility of their debt adjustment plans. In addition, the approach overcompensates creditors because the market lending rate must be high enough to cover factors, like lenders’ transaction costs and overall profits, that are no longer relevant in the context of court-administered and court-supervised cram down loans."
Whether that is true or not of chapter 13, it’s obviously not true of chapter 11 cases, where bankruptcy judges hear evidence of market comps all the time, in contexts from lift – stay appraisals to solvency determination in avoidance actions to cram-downs at confirmation. I cannot think of a determination of value in chapter 11 that does not involve some evidence about market value. For example, to cite the most pertinent example, when parties present to the judge their estimates of a debtor's reorganization value, the most common method is the DCF, or discounted cash flow method, in which the debtor's projected net cash flow for several post-reorganized years is discounted to present value, and the typical discounting rate is the WACC, or weighted average cost of capital, in which all the inputs are determined by arrived at by referring to market rates, whether they be rates specific to the debtor, or to similar companies, or to broad swaths of the market. And that's how you get to the asset side of the post-reorganization balance sheet. That quantifying the liability side would be done by excluding market evidence is utterly incoherent. Like all chapter 11 judges, Judge Drain sits through testimony market value testimony repeatedly, so it's not very convincing to then adopt a line of reasoning that "considering evidence about the market" is "far-removed" from his "usual task". That is the usual task of bankruptcy judges in commercial bankruptcies! Honestly, the Till plurality was comprised of four men and women with no experience in private commercial practice, finance, or chapter 11; they were just ignorant of how chapter 11 worked, and those who are expert in it should be correcting that ignorance, not perpetuating it.