Bankruptcy Code Section 941- Section 946, Section 1101 - Section 1105
§ 941. Filing of plan
The debtor shall file a plan for the adjustment of the debtor's debts. If such a plan is not filed with the petition, the debtor shall file such a plan at such later time as the court fixes.
§ 942. Modification of plan
The debtor may modify the plan at any time before confirmation, but may not modify the plan so that the plan as modified fails to meet the requirements of this chapter [11 USCS §§ 901 et seq.]. After the debtor files a modification, the plan as modified becomes the plan.
§ 943. Confirmation
(a) A special tax payer may object to confirmation of a plan.
(b) The court shall confirm the plan if--
(1) the plan complies with the provisions of this title [11 USCS §§ 101 et seq.] made applicable by sections 103(e) and 901 of this title [11 USCS §§ 103(e) and 901];
(2) the plan complies with the provisions of this chapter [11 USCS §§ 901 et seq.];
(3) all amounts to be paid by the debtor or by any person for services or expenses in the case or incident to the plan have been fully disclosed and are reasonable;
(4) the debtor is not prohibited by law from taking any action necessary to carry out the plan;
(5) except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that on the effective date of the plan each holder of a claim of a kind specified in section 507(a)(2) of this title [11 USCS § 507(a)(2)] will receive on account of such claim cash equal to the allowed amount of such claim;
(6) any regulatory or electoral approval necessary under applicable nonbankruptcy law in order to carry out any provision of the plan has been obtained, or such provision is expressly conditioned on such approval; and
(7) the plan is in the best interests of creditors and is feasible.
§ 944. Effect of confirmation
(a) The provisions of a confirmed plan bind the debtor and any creditor, whether or not--
(1) a proof of such creditor's claim is filed or deemed filed under section 501 of this title [11 USCS § 501];
(2) such claim is allowed under section 502 of this title [11 USCS § 502]; or
(3) such creditor has accepted the plan.
(b) Except as provided in subsection (c) of this section, the debtor is discharged from all debts as of the time when--
(1) the plan is confirmed;
(2) the debtor deposits any consideration to be distributed under the plan with a disbursing agent appointed by the court; and
(3) the court has determined--
(A) that any security so deposited will constitute, after distribution, a valid legal obligation of the debtor; and
(B) that any provision made to pay or secure payment of such obligation is valid.
(c) The debtor is not discharged under subsection (b) of this section from any debt--
(1) excepted from discharge by the plan or order confirming the plan; or
(2) owed to an entity that, before confirmation of the plan, had neither notice nor actual knowledge of the case.
§ 945. Continuing jurisdiction and closing of the case
(a) The court may retain jurisdiction over the case for such period of time as is necessary for the successful implementation of the plan.
(b) Except as provided in subsection (a) of this section, the court shall close the case when administration of the case has been completed.
§ 946. Effect of exchange of securities before the date of the filing of the petition
The exchange of a new security under the plan for a claim covered by the plan, whether such exchange occurred before or after the date of the filing of the petition, does not limit or impair the effectiveness of the plan or of any provision of this chapter [11 USCS §§ 901 et seq.]. The amount and number specified in section 1126(c) of this title [11 USCS § 1126(c)] include the amount and number of claims formerly held by a creditor that has participated in any such exchange.
Review expert commentary from The National Institute for Trial Advocacy
Preceding § 1101
Review expert commentary from The National Institute for Trial Advocacy preceding 11 USCS § 1101.
§ 1101. Definitions for this chapter
In this chapter [11 USCS §§ 1101 et seq.]--
(1) "debtor in possession" means debtor except when a person that has qualified under section 322 of this title [11 USCS § 322] is serving as trustee in the case;
(2) "substantial consummation" means--
(A) transfer of all or substantially all of the property proposed by the plan to be transferred;
(B) assumption by the debtor or by the successor to the debtor under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and
(C) commencement of distribution under the plan.
Review expert commentary from The National Institute for Trial Advocacy
§ 1102. Creditor's and equity security holders' committees
(a)
(1) Except as provided in paragraph (3), as soon as practicable after the order for relief under chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate.
(2) On request of a party in interest, the court may order the appointment of additional committees of creditors or of equity security holders if necessary to assure adequate representation of creditors or of equity security holders. The United States trustee shall appoint any such committee.
(3) On request of a party in interest in a case in which the debtor is a small business debtor and for cause, the court may order that a committee of creditors not be appointed.
(4) On request of a party in interest and after notice and a hearing, the court may order the United States trustee to change the membership of a committee appointed under this subsection, if the court determines that the change is ne-cessary to ensure adequate representation of creditors or equity security holders. The court may order the United States trustee to increase the number of members of a committee to include a creditor that is a small business concern (as described in section 3(a)(1) of the Small Business Act [15 USCS § 632(a)(1)]), if the court determines that the creditor holds claims (of the kind represented by the committee) the aggregate amount of which, in comparison to the annual gross revenue of that creditor, is disproportionately large.
(b)
(1) A committee of creditors appointed under subsection (a) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest claims against the debtor of the kinds represented on such committee, or of the members of a committee organized by creditors before the commencement of the case under this chapter [11 USCS §§ 1101 et seq.], if such committee was fairly chosen and is representative of the different kinds of claims to be represented.
(2) A committee of equity security holders appointed under subsection (a)(2) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest amounts of equity securities of the debtor of the kinds represented on such committee.
(3) A committee appointed under subsection (a) shall--
(A) provide access to information for creditors who--
(i) hold claims of the kind represented by that committee; and
(ii) are not appointed to the committee;
(B) solicit and receive comments from the creditors described in subparagraph (A); and
(C) be subject to a court order that compels any additional report or disclosure to be made to the creditors described in subparagraph (A).
§ 1103. Powers and duties of committees
(a) At a scheduled meeting of a committee appointed under section 1102 of this title [11 USCS § 1102], at which a majority of the members of such committee are present, and with the court's approval, such committee may select and authorize the employment by such committee of one or more attorneys, accountants, or other agents, to represent or perform services for such committee.
(b) An attorney or accountant employed to represent a committee appointed under section 1102 of this title [11 USCS § 1102] may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. Representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest.
(c) A committee appointed under section 1102 of this title [11 USCS § 1102] may--
(1) consult with the trustee or debtor in possession concerning the administration of the case;
(2) investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;
(3) participate in the formulation of a plan, advise those represented by such committee of such committee's deter-minations as to any plan formulated, and collect and file with the court acceptances or rejections of a plan;
(4) request the appointment of a trustee or examiner under section 1104 of this title [11 USCS § 1104]; and
(5) perform such other services as are in the interest of those represented.
(d) As soon as practicable after the appointment of a committee under section 1102 of this title [11 USCS § 1102], the trustee shall meet with such committee to transact such business as may be necessary and proper.
Review expert commentary from The National Institute for Trial Advocacy following 11 USCS § 102 (relating to rules of construction).
Review expert commentary from The National Institute for Trial Advocacy preceding 11 USCS § 1101.
§ 1104. Appointment of trustee or examiner
(a) At any time after the commencement of the case but before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of a trustee--
(1) for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case, or similar cause, but not including the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor;
(2) if such appointment is in the interests of creditors, any equity security holders, and other interests of the estate, without regard to the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor; or
(3) if grounds exist to convert or dismiss the case under section 1112 [11 USCS § 1112], but the court determines that the appointment of a trustee or an examiner is in the best interests of creditors and the estate.
(b) (1) Except as provided in section 1163 of this title [11 USCS § 1163], on the request of a party in interest made not later than 30 days after the court orders the appointment of a trustee under subsection (a), the United States trustee shall convene a meeting of creditors for the purpose of electing one disinterested person to serve as trustee in the case. The election of a trustee shall be conducted in the manner provided in subsections (a), (b), and (c) of section 702 of this title [11 USCS § 702].
(2) (A) If an eligible, disinterested trustee is elected at a meeting of creditors under paragraph (1), the United States trustee shall file a report certifying that election.
(B) Upon the filing of a report under subparagraph (A)--
(i) the trustee elected under paragraph (1) shall be considered to have been selected and appointed for purposes of this section; and
(ii) the service of any trustee appointed under subsection (d) shall terminate.
(C) The court shall resolve any dispute arising out of an election described in subparagraph (A).
(c) If the court does not order the appointment of a trustee under this section, then at any time before the confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of an examiner to conduct such an investigation of the debtor as is appropriate, including an investigation of any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the debtor of or by current or former management of the debtor, if--
(1) such appointment is in the interests of creditors, any equity security holders, and other interests of the estate; or
(2) the debtor's fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceed $ 5,000,000.
(d) If the court orders the appointment of a trustee or an examiner, if a trustee or an examiner dies or resigns during the case or is removed under section 324 of this title [11 USCS § 324], or if a trustee fails to qualify under section 322 of this title, then the United States trustee, after consultation with parties in interest, shall appoint, subject to the court's approval, one disinterested person other than the United States trustee to serve as trustee or examiner, as the case may be, in the case.
(e) The United States trustee shall move for the appointment of a trustee under subsection (a) if there are reasonable grounds to suspect that current members of the governing body of the debtor, the debtor's chief executive or chief financial officer, or members of the governing body who selected the debtor's chief executive or chief financial officer, participated in actual fraud, dishonesty, or criminal conduct in the management of the debtor or the debtor's public financial reporting.
Review expert commentary from The National Institute for Trial Advocacy
§ 1105. Termination of trustee's appointment
At any time before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court may terminate the trustee's appointment and restore the debtor to possession and management of the property of the estate and of the operation of the debtor's business.
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The debtor shall file a plan for the adjustment of the debtor's debts. If such a plan is not filed with the petition, the debtor shall file such a plan at such later time as the court fixes.
§ 942. Modification of plan
The debtor may modify the plan at any time before confirmation, but may not modify the plan so that the plan as modified fails to meet the requirements of this chapter [11 USCS §§ 901 et seq.]. After the debtor files a modification, the plan as modified becomes the plan.
§ 943. Confirmation
(a) A special tax payer may object to confirmation of a plan.
(b) The court shall confirm the plan if--
(1) the plan complies with the provisions of this title [11 USCS §§ 101 et seq.] made applicable by sections 103(e) and 901 of this title [11 USCS §§ 103(e) and 901];
(2) the plan complies with the provisions of this chapter [11 USCS §§ 901 et seq.];
(3) all amounts to be paid by the debtor or by any person for services or expenses in the case or incident to the plan have been fully disclosed and are reasonable;
(4) the debtor is not prohibited by law from taking any action necessary to carry out the plan;
(5) except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that on the effective date of the plan each holder of a claim of a kind specified in section 507(a)(2) of this title [11 USCS § 507(a)(2)] will receive on account of such claim cash equal to the allowed amount of such claim;
(6) any regulatory or electoral approval necessary under applicable nonbankruptcy law in order to carry out any provision of the plan has been obtained, or such provision is expressly conditioned on such approval; and
(7) the plan is in the best interests of creditors and is feasible.
§ 944. Effect of confirmation
(a) The provisions of a confirmed plan bind the debtor and any creditor, whether or not--
(1) a proof of such creditor's claim is filed or deemed filed under section 501 of this title [11 USCS § 501];
(2) such claim is allowed under section 502 of this title [11 USCS § 502]; or
(3) such creditor has accepted the plan.
(b) Except as provided in subsection (c) of this section, the debtor is discharged from all debts as of the time when--
(1) the plan is confirmed;
(2) the debtor deposits any consideration to be distributed under the plan with a disbursing agent appointed by the court; and
(3) the court has determined--
(A) that any security so deposited will constitute, after distribution, a valid legal obligation of the debtor; and
(B) that any provision made to pay or secure payment of such obligation is valid.
(c) The debtor is not discharged under subsection (b) of this section from any debt--
(1) excepted from discharge by the plan or order confirming the plan; or
(2) owed to an entity that, before confirmation of the plan, had neither notice nor actual knowledge of the case.
§ 945. Continuing jurisdiction and closing of the case
(a) The court may retain jurisdiction over the case for such period of time as is necessary for the successful implementation of the plan.
(b) Except as provided in subsection (a) of this section, the court shall close the case when administration of the case has been completed.
§ 946. Effect of exchange of securities before the date of the filing of the petition
The exchange of a new security under the plan for a claim covered by the plan, whether such exchange occurred before or after the date of the filing of the petition, does not limit or impair the effectiveness of the plan or of any provision of this chapter [11 USCS §§ 901 et seq.]. The amount and number specified in section 1126(c) of this title [11 USCS § 1126(c)] include the amount and number of claims formerly held by a creditor that has participated in any such exchange.
Review expert commentary from The National Institute for Trial Advocacy
Preceding § 1101
Review expert commentary from The National Institute for Trial Advocacy preceding 11 USCS § 1101.
§ 1101. Definitions for this chapter
In this chapter [11 USCS §§ 1101 et seq.]--
(1) "debtor in possession" means debtor except when a person that has qualified under section 322 of this title [11 USCS § 322] is serving as trustee in the case;
(2) "substantial consummation" means--
(A) transfer of all or substantially all of the property proposed by the plan to be transferred;
(B) assumption by the debtor or by the successor to the debtor under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and
(C) commencement of distribution under the plan.
Review expert commentary from The National Institute for Trial Advocacy
§ 1102. Creditor's and equity security holders' committees
(a)
(1) Except as provided in paragraph (3), as soon as practicable after the order for relief under chapter 11 of this title, the United States trustee shall appoint a committee of creditors holding unsecured claims and may appoint additional committees of creditors or of equity security holders as the United States trustee deems appropriate.
(2) On request of a party in interest, the court may order the appointment of additional committees of creditors or of equity security holders if necessary to assure adequate representation of creditors or of equity security holders. The United States trustee shall appoint any such committee.
(3) On request of a party in interest in a case in which the debtor is a small business debtor and for cause, the court may order that a committee of creditors not be appointed.
(4) On request of a party in interest and after notice and a hearing, the court may order the United States trustee to change the membership of a committee appointed under this subsection, if the court determines that the change is ne-cessary to ensure adequate representation of creditors or equity security holders. The court may order the United States trustee to increase the number of members of a committee to include a creditor that is a small business concern (as described in section 3(a)(1) of the Small Business Act [15 USCS § 632(a)(1)]), if the court determines that the creditor holds claims (of the kind represented by the committee) the aggregate amount of which, in comparison to the annual gross revenue of that creditor, is disproportionately large.
(b)
(1) A committee of creditors appointed under subsection (a) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest claims against the debtor of the kinds represented on such committee, or of the members of a committee organized by creditors before the commencement of the case under this chapter [11 USCS §§ 1101 et seq.], if such committee was fairly chosen and is representative of the different kinds of claims to be represented.
(2) A committee of equity security holders appointed under subsection (a)(2) of this section shall ordinarily consist of the persons, willing to serve, that hold the seven largest amounts of equity securities of the debtor of the kinds represented on such committee.
(3) A committee appointed under subsection (a) shall--
(A) provide access to information for creditors who--
(i) hold claims of the kind represented by that committee; and
(ii) are not appointed to the committee;
(B) solicit and receive comments from the creditors described in subparagraph (A); and
(C) be subject to a court order that compels any additional report or disclosure to be made to the creditors described in subparagraph (A).
§ 1103. Powers and duties of committees
(a) At a scheduled meeting of a committee appointed under section 1102 of this title [11 USCS § 1102], at which a majority of the members of such committee are present, and with the court's approval, such committee may select and authorize the employment by such committee of one or more attorneys, accountants, or other agents, to represent or perform services for such committee.
(b) An attorney or accountant employed to represent a committee appointed under section 1102 of this title [11 USCS § 1102] may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case. Representation of one or more creditors of the same class as represented by the committee shall not per se constitute the representation of an adverse interest.
(c) A committee appointed under section 1102 of this title [11 USCS § 1102] may--
(1) consult with the trustee or debtor in possession concerning the administration of the case;
(2) investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a plan;
(3) participate in the formulation of a plan, advise those represented by such committee of such committee's deter-minations as to any plan formulated, and collect and file with the court acceptances or rejections of a plan;
(4) request the appointment of a trustee or examiner under section 1104 of this title [11 USCS § 1104]; and
(5) perform such other services as are in the interest of those represented.
(d) As soon as practicable after the appointment of a committee under section 1102 of this title [11 USCS § 1102], the trustee shall meet with such committee to transact such business as may be necessary and proper.
Review expert commentary from The National Institute for Trial Advocacy following 11 USCS § 102 (relating to rules of construction).
Review expert commentary from The National Institute for Trial Advocacy preceding 11 USCS § 1101.
§ 1104. Appointment of trustee or examiner
(a) At any time after the commencement of the case but before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of a trustee--
(1) for cause, including fraud, dishonesty, incompetence, or gross mismanagement of the affairs of the debtor by current management, either before or after the commencement of the case, or similar cause, but not including the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor;
(2) if such appointment is in the interests of creditors, any equity security holders, and other interests of the estate, without regard to the number of holders of securities of the debtor or the amount of assets or liabilities of the debtor; or
(3) if grounds exist to convert or dismiss the case under section 1112 [11 USCS § 1112], but the court determines that the appointment of a trustee or an examiner is in the best interests of creditors and the estate.
(b) (1) Except as provided in section 1163 of this title [11 USCS § 1163], on the request of a party in interest made not later than 30 days after the court orders the appointment of a trustee under subsection (a), the United States trustee shall convene a meeting of creditors for the purpose of electing one disinterested person to serve as trustee in the case. The election of a trustee shall be conducted in the manner provided in subsections (a), (b), and (c) of section 702 of this title [11 USCS § 702].
(2) (A) If an eligible, disinterested trustee is elected at a meeting of creditors under paragraph (1), the United States trustee shall file a report certifying that election.
(B) Upon the filing of a report under subparagraph (A)--
(i) the trustee elected under paragraph (1) shall be considered to have been selected and appointed for purposes of this section; and
(ii) the service of any trustee appointed under subsection (d) shall terminate.
(C) The court shall resolve any dispute arising out of an election described in subparagraph (A).
(c) If the court does not order the appointment of a trustee under this section, then at any time before the confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court shall order the appointment of an examiner to conduct such an investigation of the debtor as is appropriate, including an investigation of any allegations of fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs of the debtor of or by current or former management of the debtor, if--
(1) such appointment is in the interests of creditors, any equity security holders, and other interests of the estate; or
(2) the debtor's fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceed $ 5,000,000.
(d) If the court orders the appointment of a trustee or an examiner, if a trustee or an examiner dies or resigns during the case or is removed under section 324 of this title [11 USCS § 324], or if a trustee fails to qualify under section 322 of this title, then the United States trustee, after consultation with parties in interest, shall appoint, subject to the court's approval, one disinterested person other than the United States trustee to serve as trustee or examiner, as the case may be, in the case.
(e) The United States trustee shall move for the appointment of a trustee under subsection (a) if there are reasonable grounds to suspect that current members of the governing body of the debtor, the debtor's chief executive or chief financial officer, or members of the governing body who selected the debtor's chief executive or chief financial officer, participated in actual fraud, dishonesty, or criminal conduct in the management of the debtor or the debtor's public financial reporting.
Review expert commentary from The National Institute for Trial Advocacy
§ 1105. Termination of trustee's appointment
At any time before confirmation of a plan, on request of a party in interest or the United States trustee, and after notice and a hearing, the court may terminate the trustee's appointment and restore the debtor to possession and management of the property of the estate and of the operation of the debtor's business.
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