Law360, New York (February 17, 2016, 4:38 PM EST) -- On Feb. 8, 2016, in In re The Village at Lakeridge LLC,[1]the United States Court of Appeals for the Ninth Circuit held that a claim of an "insider," which is not counted for the purposes of creating an accepting impaired class for confirmation of a contested plan of reorganization, does not retain insider status once transferred to a third party that is not an insider. The ruling potentially creates an additional avenue for plan confirmation in small cases with few noninsider creditors. It also stands in contrast with rulings of several other courts regarding other Bankruptcy Code provisions that have held that a subsequent transfer to an innocent third party did not remove the negative treatment of such claim resulting from the prior holder's failure to return an avoidable transfer, or the prior holder's inequitable conduct.[2]...