casemark/disclosure-statement-plan-reorganization

Disclosure Statement for Plan of Reorganization

Drafts a § 1125-compliant disclosure statement providing "adequate information" to enable a hypothetical reasonable investor of each class to make an informed judgment about the proposed plan.

Prerequisites

1. Case details — debtor name, case number, court, filing date
2. Plan of Reorganization — final or near-final draft
3. Financial records — P&L, balance sheets, cash flow (min. 3 years)
4. Schedules and SOFA — filed schedules of assets/liabilities, statement of financial affairs
5. Asset appraisals — valuations for significant estate property
6. Exit financing — term sheets, LOIs, or DIP financing terms
7. Claims register or bar date order — for creditor classification
8. Executory contracts/leases — with assume/reject decisions

Quick Start

1. Gather all prerequisites; confirm Plan draft is near-final
2. Draft sections 1–8 below, cross-checking every figure against the Plan
3. Run the guidelines checklist before finalizing
4. Submit to court for approval under § 1125 — do not solicit votes until approval order is entered

Output Structure

1. Introduction

• Debtor, case number, court, petition date
• State § 1125 "adequate information" standard
• Section roadmap and cross-reference to Plan

2. Debtor Background

| Element | Content | |---|---| | Corporate history | Formation, ownership, key subsidiaries | | Operations | Revenue streams, customers, geography | | Assets | Categories with current valuations | | Liabilities | Secured, priority, general unsecured — with amounts | | Events of distress | Precipitating factors (operational, market, structural) |

3. Class Treatment Summary

| Class | Description | Impaired? | Treatment | Est. Recovery % | |---|---|---|---|---| | Admin/Priority | § 507 claims | No (deemed accept) | Paid in full on effective date | 100% | | Class 1 | Secured | [Yes/No] | [Cramdown / reinstatement / payoff] | [X%] | | Class 2 | General unsecured | Yes | [Pro rata / % payout / new equity] | [X%] | | Class 3 | Equity interests | [Yes/No] | [Retained / cancelled / new issuance] | [X%] |

Flag which classes are deemed to accept (unimpaired) or reject (receive nothing) and do not vote.

4. Financial Projections and Feasibility

• Historical: 3-year P&L, balance sheet, cash flow
• Projections: 3–5 years — revenues, expenses, EBITDA, debt service
• Assumptions: State explicitly (growth rate, cost savings, headcount, CapEx)
• Liquidation analysis: Side-by-side Plan recovery vs. Chapter 7 proceeds per class (required)
• Feasibility: Address § 1129(a)(11) — plan not likely followed by further liquidation or reorganization

5. Risk Factors

• Confirmation: Feasibility challenges, fair-and-equitable objections, cramdown disputes
• Operational: Customer concentration, regulatory exposure, key-person dependency
• Legal: Pending litigation, preference/fraudulent transfer exposure, disputed claims
• Funding: Exit financing contingencies, asset sale completion, DIP maturity

6. Implementation and Funding

• Sources: Cash on hand, operations, asset sales, new equity, exit facility, litigation recoveries
• Exit financing details: Lender, amount, conditions precedent, status
• Distribution timeline: Effective date trigger, initial distribution, periodic schedule
• Executory contracts: Table of assumed, assigned, and rejected — with rejection damage treatment
• Restructuring steps: Entity mergers, asset transfers, new governance

7. Voting and Confirmation

• Voting deadline: [DATE]
• Ballot submission: Method, address, instructions
• Confirmation standards (§ 1129): at least one impaired accepting class (excluding insiders); feasibility; good faith; fair and equitable to non-consenting classes
• Hearing: Date, time, courtroom
• Objection deadline: [DATE — typically 7 days before hearing per local rules]
• Effect: Discharge of pre-petition debts; binding on all parties

8. Conclusion

• Recommendation to vote in favor
• Why Plan is superior to liquidation or competing plan
• Counsel contact information
• Forward-looking statement disclaimer

Guidelines

• Plan consistency: Every treatment, amount, and timing must match the Plan exactly — discrepancies are grounds for disapproval
• Plain language: Class treatments must be readable by lay creditors; define all terms on first use
• Bluebook citations: All statutory, rule, and case citations in proper format
• Source attribution: Pinpoint-cite factual assertions to case record documents
• Liquidation analysis: Must be prepared by a qualified financial advisor or state methodology — flag for client's financial professional
• Local rules: Verify voting procedures, notice requirements, and objection deadlines against applicable district rules [VERIFY per district]
• Projections disclaimer: Include forward-looking statement disclaimer per USTP guidelines
• § 1125(d): Court must approve disclosure statement before vote solicitation — never solicit before approval order entry