HOW CHAPTER 11
Generally, a written disclosure statement
and a plan of reorganization must be filed with the court. 11
U.S.C. §§ 1121, 1125. The disclosure statement is a document
that must contain information concerning the assets, liabilities,
and business affairs of the debtor sufficient to enable a creditor
to make an informed judgment about the debtor’s plan of
reorganization. 11 U.S.C. § 1125. The information required is
governed by judicial discretion and the circumstances of the case.
In a “small business case” (discussed below) the debtor may
not need to file a separate disclosure statement if the court
determines that adequate information is contained in the plan. 11
U.S.C. § 1125(f). The contents of the plan must include a
classification of claims and must specify how each class of claims
will be treated under the plan. 11 U.S.C. § 1123. Creditors whose
claims are “impaired,” i.e., those whose contractual rights
are to be modified or who will be paid less than the full value of
their claims under the plan, vote on the plan by ballot. 11 U.S.C.
§ 1126. After the disclosure statement is approved by the court
and the ballots are collected and tallied, the court will conduct
a confirmation hearing to determine whether to confirm the plan.11
U.S.C. § 1128.