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

Element	Content
Debtor identification	Legal name, DBAs, state of org, principal place of business
Statutory authority	§ 1121(a) (exclusive period) or § 1121(c) (non-debtor proponent)
Case narrative	Concise summary of distress, post-petition performance, reorganization strategy

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:

Class	Description	Impairment	Notes
1	Secured Claims (per collateral pool)	Varies	Separate class per distinct collateral; § 506(a) allowed amount vs. deficiency
2	Priority Unsecured (§ 507(a)(4)–(5))	Typically unimpaired	Wage, employee benefit claims
3	General Unsecured	Typically impaired	Largest class by creditor count
3A	Convenience Class (optional)	Unimpaired	Small claims below threshold
4	Subordinated Claims	Impaired	Agreement, statutory, or equitable subordination
5	Equity Interests	Impaired	Separate classes if complex capital structure

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:

Element	Specification
Recovery percentage	Against allowed claim amount
Distribution form	Cash, property, new securities, or combination
Payment timing	Lump sum vs. installment schedule
Interest rate	Market rate for deferred payments (required for cramdown)
Funding source	Operations, exit facility, asset sales, contributions
Present value	Discount rate and PV calculation for installments

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:

Source	Details
Cash on hand	Projected Effective Date balance
Operating cash flow	Reference financial projections
Asset sales	§ 363 or post-confirmation; timeline and process
Exit financing	Terms, lender, commitment status
Capital contributions	Source and conditions

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

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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