The Lenders argue correctly that the methodology employed by the bankruptcy court in these calculations is a matter of law subject to de novo review. See In re Kidd, 315 F.3d 671, 675 (6th Cir. 2003). However, after reviewing the bankruptcy court's methodology de novo, this Court also reviews the application of the methodology and the selection of the specific numbers under the clear error standard.

The latter option is commonly referred to as the "cram down" alternative, because it allows the debtor to "cram down" the proposed plan over the objection of a secured claim holder. Till, 541 U.S. at ___, 124 S. Ct. at 1955; Household Auto. Fin. Corp. v. Burden (In re Kidd), 315 F.3d 671, 672, 675 (6th Cir. 2003) (noting that "[a]lthough the Bankruptcy Code nowhere uses the words `cram down,' the term has come to denote the confirmation of a plan over the objection of a secured creditor"); In re Jones, 219 B.R. 506, 507 (Bankr. N.D. Ill. 1998). Through a cram down, a debtor is allowed to keep her property, and the secured creditor retains its lien. Jones, 219 B.R. at 507.

The Sixth Circuit has time and time again upheld the "coerced loan" theory in the context of a cramdown confirmation. As recently as last month, the Sixth Circuit affirmed the bankruptcy court's decision to apply the "coerced loan theory" in the context of subprime financing on a consumer car loan in a chapter 13. Household Automotive Finance Corp. v. Burden (In re Kidd), 315 F.3d 671 (6th Cir. 2003). In that case, the lender was a subprime lender, and the debtors were paying an interest rate of 20.95%.

Milham, 141 F.3d at 424 (citing Assocs. Commercial Corp. v. Rash, 520 U.S. 953, 957, 117 S. Ct. 1879, 1882-83, 138 L. Ed. 2d 148 (1997)); see also In re Kidd, 315 F.3d 671, 675 (6th Cir. 2003) (recognizing that the "cram-down" provision, in effect, "requires the creditor to make a new loan in the amount of the value of the collateral rather than repossess it, and the creditor is entitled to interest on his loan"). "In theory, a creditor who receives the `present value' of its allowed claim is placed in the same economic position that it would have been in had it received the value of its allowed claim on the date the reorganization plan was confirmed."

The Sixth Circuit held that § 1325 required consideration of risk using the “coerced loan” approach, which looked to “the current conventional market rate used for similar loans in the region.” Household Auto. Fin. Corp. v. Burden (In re Kidd), 315 F.3d 671, 678 (6th Cir.2003) ; see alsoMemphis Bank & Trust Co. v. Whitman, 692 F.2d 427 (6th Cir.1982). This approach did not consider a debtor's credit-worthiness. Kidd, 315 F.3d at 678.

While Circuits addressing the issue are divided over how to calculate risk, to my knowledge all of them require some compensation for risk, either explicitly or implicitly. See In re Valenti, supra, at 64 (treasury rate plus 1%-3% risk premium); GMAC v. Jones, 999 F. 2d 63, 71 (CA3 1993) (contract rate); United Carolina Bank v. Hall, 993 F. 2d 1126, 1131 (CA4 1993) (creditor's rate for similar loans, but not higher than contract rate); In re Smithwick, 121 F. 3d 211, 214 (CA5 1997) (contract rate); In re Kidd, 315 F. 3d 671, 678 (CA6 2003) (market rate for similar loans); In re Till, 301 F. 3d 583, 592-593 (CA7 2002) (case below) (contract rate); In re Fisher, 930 F. 2d 1361, 1364 (CA8 1991) (market rate for similar loans) (interpreting parallel Chapter 12 provision); In re Fowler, 903 F. 2d 694, 698 (CA9 1990) (prime rate plus risk premium); In re Hardzog, 901 F. 2d 858, 860 (CA10 1990) (market rate for similar loans, but not higher than contract rate) (Chapter 12); In re Southern States Motor Inns, Inc., 709 F. 2d 647, 652-653 (CA11 1983) (market rate for similar loans) (interpreting similar Chapter 11 provision); see also 8 Collier on Bankruptcy ¶ 1325.06[3][b], p. 1325-37 (rev. 15th ed. 2004).

In its pre- Till assessment, the bankruptcy court relied on several Sixth Circuit cases calling for the application of the coerced loan theory in determining cramdown interest rates. See Household Auto. Fin. Corp. v. Burden ( In re Kidd), 315 F.3d 671 (6th Cir. 2003) (applying the coerced loan theory in a Chapter 13 context); Memphis Bank Trust Co. v. Whitman, 692 F.2d 427 (6th Cir. 1982) (same). Under the coerced loan theory, courts "treat any deferred payment of an obligation under a plan as a coerced loan and the rate of return with respect to such loan must correspond to the rate that would be charged or obtained by the creditor making a loan to a third party with similar terms, duration, collateral and risk.

Other circuit courts addressing this issue reached different results, leading to a circuit split. See, G.M.A.C. v. Valenti (In re Valenti), 105 F.3d 55, 64 (2d Cir.1997) (treasury rate plus risk premium); G.M.A.C. v. Jones, 999 F.2d 63, 71 (3d Cir.1993) (contract rate); United Carolina Bank v. Hall, 993 F.2d 1126, 1131 (4th Cir.1993) (creditor's rate for similar loans, but not higher than contract rate); Household Auto. Fin. Corp. v. Burden (In re Kidd), 315 F.3d 671, 678 (6th Cir.2003)(market rate for similar loans); In re Till, 301 F.3d 583, 592–93 (7th Cir.2002) (contract rate), rev'd,541 U.S. 465, 124 S.Ct. 1951, 158 L.Ed.2d 787;U.S.D.A. v. Fisher (In re Fisher), 930 F.2d 1361, 1364 (8th Cir.1991) (market rate for similar loans); Farm Credit Bank of Spokane v. Fowler (In re Fowler), 903 F.2d 694, 698 (9th Cir.1990) (prime rate plus risk premium; interpreting parallel chapter 12 provision); Hardzog v. The Fed. Land Bank of Wichita (In re Hardzog), 901 F.2d 858, 860 (10th Cir.1990) (market rate for similar loans, but not higher than contract rate; interpreting parallel chapter 12 provision). 3. Post–Confirmation Interest under Till

But the Court concludes that neither American HomePatient, nor the case cited by Debtor, In re Brice Road Developments, LLC, 392 B.R. 274, 279-281 (B.A.P. 6th Cir. 2008), nor any other case cited by the Debtor, precludes the Court's consideration of the lending risks associated with a borrower similar to the Debtor. Debtor's reliance on In re Kidd, 315 F.3d 671 (6th Cir. 2003), is misplaced. Kidd was a Chapter 13 case, and it preceded the Supreme Court's decision in the Till case, Till v. SCS Credit Corp., 541 U.S. 465 (2004). Kidd also preceded the Sixth Circuit's post-Till Chapter 11 case, American HomePatient.

Prior to the Supreme Court's opinion in Till, the Sixth Circuit relied on the "coerced loan theory" in determining the appropriate cramdown interest rate. See Household Auto Fin. Corp. v. Burden (In re Kidd), 315 F.3d 671 (6th Cir. 2003); Memphis Bank & Truste Co. v. Whitman, 692 F.2d 427 (6th Cir. 1982). --------