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DEWSNUP v. TIMM Scalia, J., dissenting

see 11 U. S. C. § 103(a) (providing that “chapters 1, 3, and 5 . . . [shall] apply in a case under chapter 7, 11, 12, or 13”), Chapter 7 would not appear unduly attractive. In any event, reorganization contains other enticements to lure a debtor away from Chapter 7. It not only permits him to maintain control over his personal and business assets, but affords a broader discharge from prepetition in personam liabilities. Compare, e. g., 11 U. S. C. § 523 (listing numerous exceptions to Chapter 7 discharge) with 11 U. S. C. § 1328(a) (listing two exceptions to Chapter 13 discharge). Compare, e. g., Kelly v. Robinson, 479 U. S. 36, 50 (1986) (restitution obligations imposed in criminal judgments nondischargeable in Chapter 7) with Pennsylvania Dept. of Public Welfare v. Davenport, 495 U. S. 552, 563–564 (1990) (such restitution obligations dischargeable in Chapter 13). Finally, respondents and the United States find it incongruous that Congress would so carefully protect secured creditors in the context of reorganization while allowing them to be fleeced in a Chapter 7 liquidation by operation of § 506(d). This view mistakes the generosity of treatment that creditors can count upon in reorganization. There, no more than under Chapter 7, can they demand the benefit of postevaluation increases in the value of property given as security. See 11 U. S. C. §§ 1129(b)(2)(A) and 1325(a)(5) (permitting “cram-down” of reorganization plan over objections of secured creditors if creditors are to receive payments equal in present value to the cash value of the collateral, and if creditors retain liens securing such payments).3 3

The election available to a secured creditor under § 1111(b)(2) to treat his undersecured claims as fully secured in a Chapter 11 reorganization notwithstanding § 506(a) does not affect this analysis, for an electing creditor is guaranteed under the reorganization plan only “property of a value, as of the effective date of the plan, that is not less than the value of such holder’s interest in the estate’s interest in the property that secures such claims.” 11 U. S. C. § 1129(a)(7)(B). In other words, “the present value of such payments [to the § 1111(b)(2) elector] need only equal the value of the secured creditor’s interest in its collateral.” 5 Collier on Bankruptcy ¶ 1111.02, pp. 1111–25 to 1111–26, n. 23 (15th ed. 1990).