How is a Chapter 11 Plan Confirmed in Florida?
The reorganization plan in Chapter 11 is central to a case, but it must be confirmed by the court. Our West Palm Beach Chapter 11 bankruptcy lawyer explains more below.
At the center of any Chapter 11 bankruptcy case is the reorganization plan. Business owners must create a plan to repay most or all of their debts, and the bankruptcy court and the business’s creditors must approve the plan. Once the bankruptcy court has approved the plan, it has officially been confirmed. Below, our West Palm Beach Chapter 11 bankruptcy lawyer explains more about the process.
Important Considerations in Chapter 11 Bankruptcy Confirmation
There are many steps involved in the Chapter 11 bankruptcy plan confirmation. These include:
- Submitting the plan and disclosure statement: The borrower first files the plan of reorganization, detailing how debts will be repaid, with the bankruptcy court. A disclosure statement is also submitted outlining the borrower’s financial situation, assets, and liabilities.
- Approval of disclosure statement: The court will review the disclosure statement, ensuring it includes enough information for creditors to make an informed decision about the plan.
- Acceptance by creditors: Any creditor that has a claim affected by the plan will vote on it. At least one class of creditors (such as secured or unsecured creditors) must approve the plan in order for it to be accepted by the court. If the plan is rejected, the court may still confirm it if certain conditions are present. This is known as a ‘cramdown.’
- Confirmation hearing: A confirmation hearing will be held to review the plan, submit supporting documentation, and hear any objections to it.
- Requirements for confirmation: The court will ensure the plan meets any requirements, such as if the plan is feasible, fair, and complies with the Bankruptcy Code.
- Confirmation: If the court determines that the reorganization plan meets all requirements, it will issue an order confirming the plan.
Other Important Considerations
There are some important considerations when drafting and submitting a Chapter 11 reorganization plan. These are as follows:
- Local rules: The bankruptcy court for the Southern District of Florida has certain rules related to Chapter 11 plan confirmation, including certain deadlines for filing required documents and objections. It is important to work with an attorney who can advise on what these are.
- Small businesses: There may be special rules that apply to small businesses filing Chapter 11.
- Individual borrowers: In Chapter 11 bankruptcy cases, individual borrowers may have to fulfill other requirements, such as filing a certificate regarding tax returns and domestic support obligations.
Our Chapter 11 Bankruptcy Lawyer in West Palm Beach Can Help
Getting a Chapter 11 reorganization plan confirmed is not as straightforward as it may seem at first. At Brian K. McMahon, P.A., our West Palm Beach Chapter 11 bankruptcy lawyer can help you create a plan that will get the approval of the court and your creditors while also making your debt easier to repay. Call us now at 561-658-1789 or contact us online to schedule a consultation with our experienced attorney and to get the legal help you need.