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Chapter Twenty-three.
Chapter 13: Reorganization Proceeding
 After reading this chapter, you will be able to:
 Describe a reorganization proceeding
 Understand the rationale of Chapter 13
 List the grounds for conversion or dismissal or
reorganization proceedings
 Know the necessary documents and their filing
deadlines in Chapter 13 proceedings
 Understand the elements of a Chapter 13 plan
 Describe the procedures for confirming and performing
a Chapter 13 plan
 Understand the difference between Chapter 13 and
Chapter 7 discharges
Documents and Deadlines in
Chapter 13
Deadline
Statute
Petition
At filing
Bankruptcy Rule 1002
Credit Counseling
Certificate at
filing
11.U.S.C. §109(h)
Statement of Financial Affairs,
Schedules
15 days
Bankruptcy Rule
1007(b)(2), (c)
Chapter 13 Plan
15 days
Bankruptcy Rule 3015
Attorneys’ Fee Statement
Creditors
Meeting
Bankruptcy Rule 2016
First Plan Payment
30 days
11 U.S.C. §1326
Adequate Protection Payments
30 days
11 U.S.C. §1326(a)
Plan Performance:
1. Family Income < SMFI
2. Family Income => SMFI
3 years
5 years
11 U.S.C. §1322(d)
11 U.S.C. §1322(d)
File tax returns for last 4 years
Creditor meeting 11 U.S.C. §1308
Causes for Conversion or Dismissal
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Loss or Diminution—reorganization unlikely
Failure to follow operating rules
Unreasonable delay prejudicial to creditors
Failure to propose a plan within court deadlines
Failure to obtain confirmation of any plan
Revocation of confirmation
Inability to commence plan
Material default in plan
Occurrence of a condition state in plan
Failure to pay court fees
Failure to file Chapter 13 statement
Failure to pay postpetition domestic support obligations
Failure to file tax returns
Reorganization
 A reorganization is a bankruptcy proceeding
where a debtor seeks confirmation of a plan
that will repay creditors while permitting the
debtor to retain assets or continue in
business.
 The proceedings permitted by Chapters 9,
11, 12, and 13 of the Bankruptcy Code are
reorganization proceedings.
Cramdown
 Cramdown is the act of obtaining confirmation
of a reorganization plan over the objection of
creditors. Different tests or procedures may
be utilized to effectuate a cramdown on either
secured or unsecured creditors.
Chapter Twenty-four. Chapter 11—
Introduction and Administration
 After reading this chapter, you will be able to:
 Understand generally Chapter 11, the most
complex type of bankruptcy proceeding
 Describe the basic documents filed in a
Chapter 11 proceeding
 Identify the appropriate filing deadlines
 Understand the various activities which should
or must be taken by a Chapter 11 debtor-inpossession within the first 60 days of filing
 List thhe operating report requirements of
Chapter 11 proceedings
Chapter 11
 Chapter 11 is the most complex, time-
consuming, and expensive of all bankruptcy
proceedings to prosecute.
 Although Chapter 11s constitute less than 1
percent of all bankruptcies filed, perhaps as
much as 90 percent of all time expended by
the Bankruptcy Court involves Chapter 11
proceedings.
D.I.P. Account/Cash Flow
ALL INCOME
Cash Collateral Account
(if required)
General Account
Payroll Account
Payroll Disbursements
All Other Distributions
Tax Account
Tax Payments
Operating Reports
 A regular report of a Chapter 11 debtor-in-
possession’s postpetition financial activity.
 Local rules will normally require the filing of
monthly reports.
Chapter 11 Administration
Documents and Deadlines
 Deadline—At Filing
 Petition and $1039.00 filing fee
 Corporate resolution of 1004 partnership
authorization
 List of creditors, unless schedules filed at filing
 List of 20 largest unsecured claims
 Corporate debtor—Exhibit A to Voluntary
Petition
 Individual debtor credit counseling certificate
 Small business debtor financial statements;
tax returns
Chapter 11 Administration
Documents and Deadlines
 Deadline—Within 15 Days of Filing
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List of equity security holders
Statement of financial affairs
Schedules of assets and liabilities
Statement of executory contracts
Debtor-in-possession bank accounts
Attorney statement of compensation
Chapter 11 Administration
Documents and Deadlines
 Deadline—Within 30 Days of Filing
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Applications to retain professionals
Applications for insider compensation
Commence operating reports
File inventory if United States Trustee requires
Chapter 11 Administration
Documents and Deadlines
 Deadline—Within 120 Days of Filing
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Assume nonresidential property leases
Operating Report
Major Features
 Summary of receipts
 Itemization of disbursements
 Identification of bank accounts
 Reconciliation of bank balances
 List of accrued and unpaid postpetition debt
 List of accrued and uncollected postpetition
accounts receivable
Chapter Twenty-five.
Chapter 11: Elements of a Plan
 After reading this chapter, you will be able to:
 List the events and documents involved in the Chapter
11 plan confirmation process
 Describe the time limits relative to filing of a Chapter 11
plan, commonly known as the “exclusivity period”
 Understand the classification of claims within a
Chapter 11 plan
 List the mandatory and permissive provisions which
must or may be included in a Chapter 11 plan
 Understand the unique Chapter 11 concept of
“impaired” claims
Plan of Reorganization
 Another name for reorganization plan
 A repayment plan prepared according to the
requirements of Chapter 11 of the Bankruptcy
Code
Exclusivity Period
 A period of time in a Chapter 11 proceeding
when only the debtor-in-possession may file a
reorganization plan.
 This period, as provided for in Section 1121
of the Bankruptcy Code, is the first 120 days
from the entry of an order for relief.
 This period can be extended.
 The period terminates upon the appointment
of a trustee.
Chapter 11 Confirmation Process
Action
Prior Notice Required
File a reorganization plan
File a disclosure statement
Disclosure statement hearing
25 days
Voting deadline set
At disclosure statement hearing
Confirmation hearing
25 days
Report of Balloting
Prior to confirmation hearing
Documents Submitted to Creditors for
Confirmation Hearing
 Included in the confirmation packet:
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Plan or court-approved summary
Disclosure statement and order approving
same
Notice of the balloting deadline
Notice of confirmation hearing
Ballot—Official Form 30
Mandatory Chapter 11 Plan Provisions
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Designate classes of claims and interests
Specify unimpaired classes
Specify treatment of impaired classes
Provide equal treatment of claims in a given
class
 Provide adequate means for the plan’s
performance
 Corporate charter provision
 Disclose postconfirmation insiders
 Individual debtor earnings
Permissive Chapter 11 Plan Provisions
 Impair classes
 Assume or reject executory contracts not
previously acted upon
 Provide for settlement of disputes
 Provide for liquidation of assets
 Modify creditor rights unless secured by
principal residence
 Include any provision consistent with
bankruptcy code
Chapter Twenty-six.
Chapter 11: Plan Confirmation
 After reading this chapter, you will be able to:
 Identify and describe the disclosure statement
requirement
 Understand the voting rules and procedures in Chapter
11 plan balloting
 List the conditions for confirmation of a Chapter 11
plan
 Describe the methodologies to cram down a Chapter
11 plan
 Describe how and when a Chapter 11 plan may be
modified
 Define the Chapter 11 discharge
Disclosure Statement
 A document filed in a Chapter 11 proceeding that
describes:
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a debtor-in-possession’s reorganization plan
its effect upon the creditors
the ability of the plan to be performed
a comparison of the reorganization plan’s repayment
proposal to the results likely to be obtained in a
Chapter 7 proceeding for the same debtor.
 The creditors of a Chapter 11 debtor-in-possession
may not vote for or against the reorganization plan
until the court approves the contents of the disclosure
statement in a disclosure statement hearing.
Cramdown
 The act of obtaining confirmation of a
reorganization plan over the objection of
creditors.
 Different tests or procedures may be utilized
to effectuate a cramdown on either secured
or unsecured creditors.
Disclosure Statement Contents
Debtor’s prepetition history
Disclosure of prepetition debt and assets
Disclosure of future income projections
Disclosure of any sale or refinancing details
Disclosure of any other plan performance method
Describe reorganization plan
Disclose liquidation analysis
Disclose postconfirmation management and
compensation
 Disclose any pending litigation and evaluation of
success
 Disclose insider transactions
 Disclose tax consequences of plan, if any
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Chapter Twenty-seven.
Reorganization Proceedings
 After reading this chapter, you will be able to:
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Describe Chapter 12 and the qualifications to
become a Chapter 12 debtor
Compare Chapter 12 to Chapters 13 and 11
Understand the unique features of Chapter 12
Describe the Chapter 12 plan and confirmation
process
Chapter 12
 Only a family farmer with regular income may
be a Chapter 12 debtor.
 Chapter 12 seeks to provide a family farmer
with the benefits of Chapter 13, the flexibility
and control of Chapter 11, and a partial
abrogation of the sometimes harsh effects of
the “adequate protection” requirement in the
special circumstances of a family farm.
 Chapter 12 gives a beleaguered family farmer
a fighting chance to resolve economic
problems and retain the family farm.
BAPCPA and Chapter 12
 BAPCPA makes Chapter 12 permanent.
 Additionally, the legislation expands the
scope of Chapter 12 to a family fisherman.
Unique Chapter 12 Features
 Existence of a trustee even thought he debtor
is the equivalent of a debtor-in-possession.
 Special definition of adequate protection.
 Permits a sale free and clear of liens if the
property sold is farmland, farm equipment or
property used to carry out a commercial
fishing operation
Chapter Twenty-eight. Introduction to
Courts and Jurisdiction
 After reading this chapter, you will be able to:
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Describe bankruptcy jurisdiction
Define the meaning of the terms “core” and
“non-core” proceedings
Define the meaning of the terms “arising
under” or “related to”
Understand how appeals are taken from a
Bankruptcy Court decision to other courts
Bankruptcy Jurisdiction
U.S. District Court
28 U.S.C §1334(a)
Withdrawal
of reference
28 U.S.C.
§157(d)
U.S. Bankruptcy Court
28 U.S.C. §157(a)
Core Proceedings
“arising under”
28 U.S.C. §157(b)
Noncore Proceedings
“related to”
28 U.S.C. §157(c)
Abstention
28 U.S.C. §1334(c)
Core and Noncore Proceedings
 Core proceedings “arising under” the
Bankruptcy Code are those matters that arise
by way of motion or adversary proceeding
and involve the specific application of one or
more provisions of the Bankruptcy Code for
their resolution.
 Noncore proceedings are matters “related to”
a bankruptcy proceeding, arising for a debtor
whether or not the particular bankruptcy
proceeding exists.
Bankruptcy Appeals
U.S. Supreme Court
U.S. Court of Appeals
District Court
Bankruptcy
Appellate Panel
Bankruptcy Court
Chapter Twenty-nine. Statements and
Schedules Tutorial
 After reading this chapter, you will be able to:
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Prepare the most important pleadings used in
Bankruptcy practice
rovide analysis on how to interpret the data
contained in the Statements and Schedules
Chapter Thirty.
Means Testing Tutorial
 After reading this chapter, you will be able to:
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Complete the means testing form
Chapter Thirty-one. Researching
Bankruptcy Issues
 After reading this chapter, you will be able to:
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Identify basic bankruptcy research sources
and suggest a methodology for their use
Bankruptcy Research Checklist
 Bankruptcy code
 Historical and revision notes
 Federal rules of bankruptcy procedure
 Local rules, including United States trustee
guidelines
 Federal rules of civil procedure, federal rules
of evidence
 Bankruptcy reporter systems
 Bankruptcy treatises