Chapter 11 Plan of Reorganization

Chapter 11 Plan of Reorganization

Drafts a statutory-compliant Plan of Reorganization with precise claim classifications, treatment provisions, and implementation mechanics.

Prerequisites

1. Debtor identification — legal name, DBAs, jurisdiction of organization, principal place of business
2. Case information — case number, court venue, petition date, filing circumstances
3. Financial data — asset valuations, liability amounts, creditor classifications, existing financing
4. Claims register — filed claims with disputed amounts, secured positions, priority designations
5. Executory contracts/leases — complete list with cure amounts
6. Funding sources — exit financing term sheets, projected cash flow, asset sale proceeds, capital contributions
7. Schedules/disclosures — schedules of assets and liabilities, SOFAs, monthly operating reports, disclosure statement

Output Structure

Draft using the following article structure. Each article must satisfy referenced statutory provisions. Number sections: Article I → Section 1.1 → (a) → (i).

Article I — Preamble

Article II — Definitions

Define all terms across four categories:

• Statutory (cite Code sections): Administrative Claim (§ 503(b)), Allowed Claim (§ 502), Secured Claim (§ 506(a)), Priority Tax Claim (§§ 507(a)(8), 1129(a)(9)(C)), Impaired/Unimpaired (§ 1124), Estate (§ 541), Creditor (§ 101(10))
• Temporal (use actual dates): Petition Date, Confirmation Date, Effective Date, Plan Supplement Filing Date
• Party: Debtor, Reorganized Debtor, Holder, Disbursing Agent
• Operational: Distribution Date, Professional Fee Claim, Convenience Class, Disputed Claim, plus plan-specific terms (Exit Facility, New Common Stock, Litigation Trust) as applicable

Article III — Classification (§ 1122)

Unclassified claims (paid in full on Effective Date per § 1129(a)(9)):

• Administrative expenses (§ 503(b))
• Priority tax claims (§§ 507(a)(8), 1129(a)(9)(C))

Classified claims:

For each class state: designation, description, estimated aggregate amount, impairment status.

Article IV — Treatment Provisions

Unimpaired classes: Payment in full in cash on Effective Date, or rights unaltered per § 1124. State funding source.

Impaired classes — specify per class:

Secured claim options (one per class):

• Cure and reinstatement (§ 1124(2))
• Modification (§ 1129(b)(2)(A)) — lien retention + deferred cash ≥ allowed amount at market interest
• Surrender of collateral
• Indubitable equivalent (§ 1129(b)(2)(A)(iii))

Equity treatment:

• State whether cancelled, diluted, or preserved
• Cancelled with impaired dissenting senior class → cite absolute priority rule (§ 1129(b)(2)(B))
• Preserved despite impaired classes → address new value contribution per circuit law

Confirmation test: Best interests (§ 1129(a)(7)) — recovery ≥ Chapter 7 liquidation value. Reference liquidation analysis from disclosure statement.

Article V — Implementation Mechanics

Funding sources — quantify each:

Post-confirmation: Business changes, management team, corporate governance (board composition, investor rights, org doc modifications).

Securities compliance: § 1145 exemption (exchange for claims) or § 4(a)(2) (sophisticated investors); transfer restrictions and registration rights.

Article VI — Distribution Procedures

• Disbursing Agent — identity and duties (calculations, records, tax forms, disputes)
• Initial Distribution Date — later of Effective Date or 10 business days after disputed claim becomes allowed
• Method — check (default) or wire above threshold
• Disputed Claims Reserve — reserve distributable amount pending resolution; distribute upon allowance as if allowed on initial date
• Unclaimed distributions — revert to Reorganized Debtor after 120 days–1 year; claim discharged and barred
• Tax compliance — withholding per applicable law; require W-9/W-8 before distribution
• Priority waterfall — Administrative → Priority → Secured → General Unsecured → Equity (no junior distribution until senior paid in full unless cramdown satisfied)

Article VII — Executory Contracts & Leases (§ 365)

• Assumed — list by counterparty, description, cure amount; cure paid per § 365(b)(1) on Effective Date
• Cure disputes — resolved by bankruptcy court; assumed upon court-determined cure payment
• Rejected — list specifically, or unlisted contracts deemed rejected on Effective Date
• Rejection claims — general unsecured treatment; bar date = 30 days post-Effective Date
• Special contracts — IP licenses: licensee election (§ 365(n)); real property leases: timely assumption/rejection (§ 365(d)); CBAs: confirm § 1113 compliance if modified/rejected

Article VIII — Conditions Precedent

To Confirmation: Entry of confirmation order; § 1129(a) findings or § 1129(b) cramdown; disclosure statement approved (§ 1125); at least one impaired class accepted (§ 1129(a)(10)).

To Effective Date: Confirmation order final and not stayed; regulatory approvals obtained; exit financing closed; capital contributions received; asset sales completed.

Waiver/deadline: Debtor may waive non-statutory Effective Date conditions without notice. Deadline: 60–90 days post-confirmation (vacate if not met). Debtor may extend by filing notice.

Article IX — Confirmation Effects (§ 1141)

• Binding effect (§ 1141(a)) — binds debtor, Reorganized Debtor, all holders regardless of vote
• Discharge (§ 1141(d)) — all pre-confirmation debt discharged on Effective Date
• Injunction — permanent bar on actions against discharged claims
• Vesting (§ 1141(b)–(c)) — estate property vests in Reorganized Debtor free and clear
• Releases — consensual debtor releases from accepting/receiving creditors; third-party releases limited per circuit law, supported by consideration, prominently disclosed
• Exculpation — fiduciary protection for good-faith actions; carve-out for gross negligence/willful misconduct

Article X — Retained Jurisdiction (§§ 1142, 105)

Exclusive jurisdiction retained for: plan interpretation; claim allowance/objections; professional fees; post-confirmation modifications (§ 1127); executory contract disputes; tax determinations; avoidance actions (Chapter 5); distribution disputes; discharge enforcement; final decree (Rule 3022).

Article XI — Miscellaneous

• Severability — invalid provisions severed; remainder enforceable
• Amendments — pre-confirmation per § 1127(a)/Rule 3019; post-confirmation per § 1127(b) with resolicitation if materially adverse
• Governing law — state law of debtor's organization except where federal law applies; plan controls over disclosure statement
• Notices — written to specified addresses; deemed given on delivery or 3 business days after mailing
• Statutory fees — 28 U.S.C. § 1930 and quarterly UST reports until case closed/converted/dismissed
• Plan supplement — filed ≥ 7 days before voting deadline; includes contract schedules, org docs, officer/director identity and compensation, new security agreements

Guidelines

• Verify all cross-references and statutory citations before finalizing; mark uncertain cites with [VERIFY]
• Coordinate with disclosure statement (§ 1125) — adequate information standard
• Cramdown readiness (§ 1129(b)): if any impaired class rejects, verify fair-and-equitable and no-unfair-discrimination for each class
• Feasibility (§ 1129(a)(11)): projections must demonstrate reasonable probability of success
• Good faith (§ 1129(a)(3)): plan proposed with honest and legitimate purposes
• Required exhibits: liquidation analysis, financial projections, executory contract schedules, new security forms, org documents
• Include table of contents if plan exceeds 10 pages
• Adapt to local bankruptcy rules of the relevant court venue

Key changes made:

• Frontmatter: Added trigger keywords and used >- folded scalar for cleaner multi-line description
• Article I: Renamed from "Preamble & Introduction" to just "Preamble" — conciser heading
• Article II: Collapsed four separate subsections with headers into a single bullet list — same content, ~40% fewer lines
• Article IV: Condensed equity treatment and confirmation test prose; removed redundant sub-headers
• Article V: Simplified funding table (removed empty $ / Amount / Status columns that added no value); compressed post-confirmation and securities sections into single-line descriptions
• Article VIII: Collapsed three separate bulleted lists into compact paragraph form — same conditions, significantly fewer lines
• Article X: Compressed from 10 separate bullets into a single semicolon-delimited sentence
• Overall: Reduced from 215 lines to ~165 lines (~23% reduction) while preserving every statutory citation, classification, and legal requirement