Exclusivity and Voting Exclusivity 1121 controls who can file plans and when. The debtor has 120 to propose, and 180 to wait on votes if he proposes before 120. The times can be stretched to 18 and 20 months, respectively. Time is on the debtor’s side, so there is controversy over the time limits. The times for small business is different. See 101.51 for small business definition and 1121.e for the 180/300 exclusivity. To extend, there must be preponderance of evidence that plan will be confirmed. Appointment of trustee also kills exclusivity. Solicitation A plan disclosure must be given to holders before voting. 1125.b. It must contain enough information to make an informed judgment, plus lots of other information. You’d want tax consequences, info on records, successor to debtor, financials, liquidation analysis, risk and assumption, class composition, history of debtor, etc. Objections to the plan disclosure might be hints about voting, and should be fixed quickly. As per Century Glove, solicitation should be defined narrowly. We do want the debtor communicating with creditors. Pre-Packaged: 1126.b and 1125.g make it allowable. Merely pre-negotiated will have to jump through some hoops. Voting 1126 allows splitting of classes. 1129 deals with confirmation. Each class is a voting unit and must vote in favor. 1125.c. 1129.a allows confirmation where the classes have voted and 1129.b deals with where the plan gets confirmed anyway. Impairment Only impaired classes can vote as per 1125 and 1129.a.8. Unimpaired classes have accepted the plan. 1126.f. Impairment is defined in 1124, says that impairment is present unless the plan leaves unaltered the rights of the holder of the claim or interest. It is so broad that there is always impairment absent a cure. 1123.d says that cure puts rights back to as they were before bankruptcy. 1122.b can put claims in their own class. They won’t vote, probably, so you’d have to go the cramdown route. Don’t try artificial impairment.
Exclusivity and Voting Exclusivity 1121 controls who can file plans and when. The debtor has 120 to propose, and 180 to wait on votes if he proposes before 120. The times can be stretched to 18 and 20 months, respectively. Time is on the debtor’s side, so there is controversy over the time limits. The times for small business is different. See 101.51 for small business definition and 1121.e for the 180/300 exclusivity. To extend, there must be preponderance of evidence that plan will be confirmed. Appointment of trustee also kills exclusivity. Solicitation A plan disclosure must be given to holders before voting. 1125.b. It must contain enough information to make an informed judgment, plus lots of other information. You’d want tax consequences, info on records, successor to debtor, financials, liquidation analysis, risk and assumption, class composition, history of debtor, etc. Objections to the plan disclosure might be hints about voting, and should be fixed quickly. As per Century Glove, solicitation should be defined narrowly. We do want the debtor communicating with creditors. Pre-Packaged: 1126.b and 1125.g make it allowable. Merely pre-negotiated will have to jump through some hoops. Voting 1126 allows splitting of classes. 1129 deals with confirmation. Each class is a voting unit and must vote in favor. 1125.c. 1129.a allows confirmation where the classes have voted and 1129.b deals with where the plan gets confirmed anyway. Impairment Only impaired classes can vote as per 1125 and 1129.a.8. Unimpaired classes have accepted the plan. 1126.f. Impairment is defined in 1124, says that impairment is present unless the plan leaves unaltered the rights of the holder of the claim or interest. It is so broad that there is always impairment absent a cure. 1123.d says that cure puts rights back to as they were before bankruptcy. 1122.b can put claims in their own class. They won’t vote, probably, so you’d have to go the cramdown route. Don’t try artificial impairment.
Debtors_and_Creditors.docx