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Chapter 11 Plan Confirmation Toolkit
Practical Law Toolkit w-015-0263 (Approx. 9 pages)
Chapter 11 Plan Confirmation Toolkit
by Practical Law Bankruptcy & Restructuring
| Maintained • USA (National/Federal) |
Resources to help companies and other eligible debtor entities and their counsel prepare and obtain court approval to confirm a Chapter 11 bankruptcy plan. This includes considerations and strategies for particular sectors such as cryptocurrency (crypto), fraudulent enterprises, mass torts, healthcare, restaurants, retail, oil and gas, small business, and individual filings. This Toolkit includes resources addressing issues such as preparing and obtaining approval of a Chapter 11 plan and disclosure statement, Chapter 11 confirmation requirements, addressing objections to confirmation, temporary allowance of claims for purposes of voting on the plan, and strategies for pursuing different types of plans and plan provisions.
A Chapter 11 proceeding allows a company, individual, or other eligible entity to reorganize or liquidate in a court-supervised process under the Bankruptcy Code. There are three statutory options for exiting Chapter 11 as follows:
- Dismissal (§ 1112(b), Bankruptcy Code).
A Chapter 11 plan must garner the support of a majority in number and two-thirds in amount of claims in each class of impaired creditors (§ 1126, Bankruptcy Code). Reaching this required consensus can take months, which leads many companies to file for Chapter 11 only after coming to agreement on the key terms of a Chapter 11 plan.
To confirm a Chapter 11 plan, a plan proponent must consider many issues, such as:
- Negotiating and drafting the plan.
- Preparing and obtaining court approval of a disclosure statement.
- Solicitation of votes on the plan.
- Chapter 11 confirmation requirements.
- Objections to confirmation.
- Whether reorganization as a going concern or liquidation of the debtor's business or assets in a section 363 sale will maximize creditor recoveries.
- Whether there is a need for a post-confirmation trust.
- Strategies for addressing environmental liabilities under a plan.
- Temporary allowance of claims for purposes of voting on the plan.
Minimizing the risk of an appeal of the confirmation order based on the doctrine of equitable mootness.
This Toolkit contains continuously maintained practice note overviews, practice notes, standard documents, and checklists to help companies, individuals, and other eligible entities understand, strategize, prepare, and obtain court approval to confirm a Chapter 11 plan.