What is a Plan of Reorganization?
The Plan of Reorganization (the “Plan”) is the Company’s formal plan setting forth in detail how the claims of each class of creditors and interest holders will be treated. The Plan further establishes the ownership and capital structure for the Company upon its emergence from bankruptcy. The Plan must be voted on and approved by a certain percentage of creditors, then be approved or “confirmed” by the Bankruptcy Court and all necessary regulatory approvals must have been received in order to become effective. 2. What is a Disclosure Statement? The Disclosure Statement is a document that is presented to the Bankruptcy Court, and ultimately to creditors, that discloses the terms of the Debtor’s Plan of Reorganization, as well as adequate information about the Company and other matters so that holders of claims against or interests in the Company can make an informed decision as to whether to vote for or against the Plan. 3. Does this mean the Company is out of Chapter 11? No. The Compan
A plan or reorganization is the document setting forth how a bankrupt company plans to satisfy its creditors. The plan of reorganization is the cornerstone of a successful Chapter 11 bankruptcy. The bankrupt company generally has 120 days following the petition filing in which to present a plan of organization to the court. Bankruptcy judges however, may extend the time in which a plan can be submitted and approved.
The Plan of Reorganization is a document that sets out how a debtor-in-possession will repay creditors. The plan divides creditors into classes. It specifies the treatment of claims for each class of creditor and provides a means for the plan`s implementation. The debtor-in-possession has the exclusive right to file a plan for up to 120 days after the filing of the petition. After this exclusivity period has expired, creditors may file a plan.
The Plan of Reorganization is a document that sets out how a debtor-in-possession will repay creditors. The plan divides creditors into classes. It specifies the treatment of claims for each class of creditor and provides a means for the plan’s implementation. The debtor-in-possession has the exclusive right to file a plan for up to 120 days after the filing of the petition. After this exclusivity period has expired, creditors may file a plan.
