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ARTICLE · 05 FEBRUARY 2019

When A Chapter 11 Plan Is Absolutely Dead On Arrival

Ward and Smith, P.A
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Recently, we discussed In re CHL, a case involving a real estate developer in Chapter 11.

United StatesInsolvency/Bankruptcy/Re-Structuring
Lance Martin
Lance Martin

Recently, we discussed In re CHL, a case involving a real estate developer in Chapter 11.

We focused on the importance of the Disclosure Statement as a prerequisite to a debtor's ability to move forward with a plan of reorganization.  In a Chapter 11 bankruptcy, the debtor attempts to reorganize its affairs through a Chapter 11 Plan.  When the debtor files its proposed Plan, it must also file a Disclosure Statement providing creditors and claimants with "adequate information" about the Plan.  Creditors rely on the Disclosure Statement to learn how, and what amount, the debtor will re-pay them under the Plan, and what risks they will face under the Plan.  Armed with this information, creditors and claimants can support or oppose the Plan, and the Court can determine if the debtor may proceed to a confirmation hearing.    

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