Plan Confirmation

AuthorBy Jan S. Gilbert and Craig R. Tractenberg
Pages197-208
197
In order for creditors and interest holders to make an educated decision
whether to support or oppose a proposed Chapter 11 plan, the Bank-
ruptcy Code requires that a disclosure statement be led, approved,
and disseminated to all parties in interest before voting to accept or
reject the plan. The disclosure statement provides the parties with a
map to the Chapter 11 plan. This map helps them to understand their
risks and recoveries under the plan, and to assist their evaluation of
whether to support the plan.
I. THE DISCLOSURE STATEMENT
Pursuant to section 1125(b) of the Bankruptcy Code, a plan proponent
cannot solicit votes on a plan from a holder of a claim or interest until
the plan proponent transmits both a plan or a summary of the plan,
and a written disclosure statement approved by the court after notice
and a hearing as containing adequate information to the holder of the
claim or interest.
Pursuant to Federal Rule of Bankruptcy Procedure 2002(b), all parties
in interest must receive by mail at least twenty-eight days’ prior notice of:
(1) the deadline for ling objections to the disclosure statement and (2)
the hearing to either consider approval of the disclosure statement or to
make a nal determination regarding whether the plan provides adequate
information so that a separate disclosure statement is not necessary.
Federal Rule of Bankruptcy Procedure 3016(b) provides that the dis-
closure statement should also be led at the time of the ling of the
plan or within a time xed by the court.
A. CONTENTS OF A DISCLOSURE STATEMENT
In order to approve a disclosure statement, a court must nd that the
disclosure statement contains adequate information for a hypothetical
Plan Confirmation
By Jan S. Gilbert and Craig R. Tractenberg 9
9781641051972_CH09.indd 197 14/06/18 4:13 PM

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