CACB — Individual Debtor’s Disclosure Statement in Support of Plan of Reorganization (F2081-1.DISCLSRSTMT)

Source: https://www.cacb.uscourts.gov/sites/cacb/files/documents/forms/F2081-1.DISCLSRSTMT.pdf

Attorney or Party Name, Address, Telephone & FAX Nos., State Bar No. & FOR COURT USE ONLY Email Address

Individual appearing without attorney
Attorney for:

UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA - SELECT DIVISION DIVISION

In re: CASE NO.: CHAPTER: 11

INDIVIDUAL DEBTOR’S DISCLOSURE

STATEMENT IN SUPPORT OF PLAN OF REORGANIZATION

DATE: TIME:

COURTROOM: PLACE:

Debtor(s).

Attached is a chapter 11 plan (the Plan) proposed by the above-named individual Debtor. The Debtor attests that

the information stated in this Disclosure Statement and the Plan is accurate. All creditors should refer to Articles I-IV of the Plan for the specific treatment of their claims. This Disclosure Statement is explanatory only; the language used in the Plan is binding. Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you have one.

EFFECTIVE DATE OF THE PLAN: The Effective Date of the Plan is 14 days following the date of entry of the order confirming the Plan unless a stay of the confirmation order is in effect, in which case the Effective Date will be the first business day after the date on which the stay of the confirmation order has been lifted, provided that the confirmation order has not been vacated.

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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Part 1 Proposed Treatment of Claims

A. Unclassified Claims including administrative priority claim, priority tax claims, and gap claims

Holders of administrative priority claims are entitled to priority pursuant to § 507(a)(2) of the Bankruptcy Code
including (i) professional fees and costs; (ii) United States trustee’s fees; and (iii) postpetition domestic support
obligations. Such claims shall be paid in full on, or as soon as practicable after, the Effective Date or upon
allowance of such claim, whichever is later.

Holders of priority tax claims are entitled to priority under § 507(a)(8). Such claims shall be paid in full over five
years from the date of the entry of the order for relief with % interest in equal [monthly/quarterly/annually]
amortized payments according to § 511 of the Bankruptcy Code. See Article I.C. of the Plan.

Holders of involuntary gap period claims allowed under § 502(f) are entitled to priority under § 507(a)(3). Such
claims will be paid in full on, or as soon as is practicable, after the Effective Date. See Article I.D. of the Plan.
Involuntary gap priority creditors exist only in cases commenced involuntarily. These are creditors who have
claims that arose after the involuntary petition was filed but prior to the court’s appointing a trustee or granting an
order for relief.

B. Secured Creditors (Classes 2, 3, 4 and 5)

See Article II of the Plan.

C. Priority Unsecured Creditors

The following class(es) of priority unsecured claims are impaired and therefore, entitled to vote under the Plan.
Such creditors will be paid [annually/quarterly/monthly] in full over years with % interest.
Payments shall be in equal [monthly/quarterly] amortizing installments beginning on the first day of each calendar
month quarter after the Effective Date. Alternatively, if any one of these Classes does not vote to accept
the Plan, then each claim in such class must be paid in full on, or as soon as practicable after, the Effective Date
(except to the extent a holder of a claim in the class agrees to other terms) or the plan cannot be confirmed. See
Article II of the Plan.

Class 1(a): Domestic support obligation
Class 1(b): Priority wage claims
Class 1(c): Employee benefit plan contribution claims
Class 1(d): Grain producer and fisherman claims
Class 1(e): Consumer deposit claims.

D. General Unsecured Creditors (Classes 6(a) and 6(b))

Class 6(a): A creditor whose allowed claim is $ or less or who elects to reduce its
allowed claim to $ will receive a single payment equal to 100% of its allowed claim on, or
as soon as practicable after, the Effective Date of the Plan. See Article II of the Plan.

Class 6(b): Other general unsecured creditors will be paid % of their allowed claims with[out] interest [at the rate of % per annum], in equal [monthly][quarterly] installments over years. Under § 1129(a)(15), if an unsecured creditor objects to confirmation, an individual debtor must either pay the present value of that unsecured claim in full or make distributions under the plan totaling at least the value of the debtor’s net disposable income over the greater of (a) five years or (b) the period for which the plan provides payments. However, § 1129(a)(15) should be read and applied in conjunction with § 1123(a)(4) which provides that a chapter 11 plan must provide the same treatment for each claim in the same particular class. See Article II of the Plan.

Undisputed Class 6 claims, as of this date, are listed in Exhibit C to the Disclosure Statement.

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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E. Executory Contracts and Unexpired Leases

(1) Executory Contracts and Leases Assumed. On the Effective Date, the Debtor assumes the

executory contracts and unexpired leases enumerated in Exhibit E to the Disclosure Statement and shall perform all obligations thereunder, both preconfirmation and postconfirmation.

Any preconfirmation arrearages shall be paid by the Effective Date, unless the parties agree otherwise or the court finds that a proposed payment schedule provides timely cure and adequate assurance of future performance. Postconfirmation obligations will be paid as they come due.

(2) Executory Contracts and Leases Rejected. The Debtor is conclusively deemed to have rejected

all executory contracts and/or unexpired leases not previously assumed or listed in Exhibit E to the Disclosure

Statement as of the Effective Date. Claims arising from the rejection of an executory contract or unexpired lease under this section are general unsecured claims in Class 6, except to the extent this court orders otherwise. A proof of claim arising from the rejection of an executory contract or unexpired lease under this section must be filed no later than 30 days after the date of the order confirming this Plan.

F. Discharge

Upon completion of the payments under the Plan, the Debtor may receive a discharge of preconfirmation debts, except such discharge shall not discharge the Debtor from any debts that are found nondischargeable under § 523 or are obligations created by this Plan. The payments promised in the Plan constitute new contractual obligations that replace the preconfirmation debts proposed to be discharged. Creditors may not sue to collect on these obligations so long as the Debtor is not in material default under the Plan. If the Debtor materially defaults in performing the Plan, affected creditors may sue the Debtor to enforce the terms of the Plan or to dismiss this case or to convert it to a case under chapter 7 of the Bankruptcy Code. See Article VI of the Plan.

Part 2

Voting on Confirmation of Plan

A. Who may vote: Only impaired creditors are entitled to vote (see § 1124). A creditor is entitled to vote on confirmation of the Plan unless (i) the creditor’s class is unimpaired (presumed to accept the Plan) or is to receive no distribution (presumed to reject the Plan); (ii) an objection has been filed to that creditor’s claim; (iii) that creditor’s claim is scheduled by the Debtor as contingent, disputed, unliquidated or unknown and the creditor has not filed a proof of claim; or (iv) the claim is unclassified (and thus required by law to be paid in full). A creditor whose claim has either been objected to or has been scheduled by Debtor as contingent, disputed, unliquidated or unknown or who has not filed a proof of claim, and who wishes to vote, must move to have its claim allowed for voting purposes by filing a motion for such relief in time for that motion to be heard before the hearing on confirmation of the Plan. A creditor whose claim has been allowed in part as a secured claim and in part as an unsecured claim is entitled to accept or reject a Plan in each capacity by delivering one ballot for the secured part of the claim and another ballot for the unsecured portion of the claim.

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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B. How to vote: A voting creditor must fill out and return the attached ballot so that it is received by the Plan proponent no later than at the following address:

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C. Effect of vote: The Plan will be confirmed only if (i) it is accepted by each impaired class, or (ii) it is accepted by at least one impaired class exclusive of insiders (as defined by §101(31)) and the court determines that the Plan is “fair and equitable” (as defined by §1129(b)) to all rejecting classes of creditors, and it meets all of the other criteria required for confirmation. A class of creditors accepts the Plan if it is accepted by a majority in number and at least two-thirds in dollar amount of the creditors in that class timely voting.

Part 3

Source(s) of Payments under the Plan

The Debtor intends to make the payments required under the Plan from the following sources:

A. Available Cash. Debtor projects $ cash will be available on the Effective Date.

B. Sale of Assets. A sale of property described in the Plan, which the Debtor estimates will produce $ .

C. Future disposable income. Debtor estimates that projected monthly disposable income available to creditors for the year1 period following confirmation will be $ .2 This is based on the monthly income of $ and expenses of $ as set forth in Debtor’s Declarations of Current/Postpetition Income and Expenses (LBR form F 3015-1.20.DEC.INCOME.EXPENSE), which have been prepared as of 3 and are attached hereto as Exhibit A.

This projection is consistent with (i) Debtor’s average monthly income for the six months prior to this case of
$ , as set forth in Debtor’s Statement of Current Monthly Income (Official Bankruptcy Form
22B) filed with this court and (ii) average monthly income of $ and average monthly
expenses (excluding professional expenses and fees incurred in this bankruptcy case) of
$ during the months since the petition date (based on monthly operating
statements filed with the court), and such differences as are explained as follows:

Upon written request, Debtor will provide copies of the Statement of Current Monthly Income and/or monthly

operating statements.

1 This number should match the number of years selected for payments made to creditors under the plan. See note 11 of the Plan as to the Absolute Priority Rule and modify this paragraph accordingly. 2 Under § 1123(a)(8), the plan of an individual debtor shall “provide for payment to creditors . . . of all or such portion” of postpetition personal services income “as is necessary for execution of the plan.” 3 LBR form F 3015-1.20.DEC.INCOME.EXPENSE should be updated to the date of the most recent financial information available for the debtor.

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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D. Other sources of funding are explained as follows:

Risk Factors

The proposed Plan has the following risks: (explain, e.g., sale falls through, Debtor loses employment/business, illness):

Part 4

Liquidation Analysis

The Debtor’s schedules A and B, that may have been amended for the purposes of this Disclosure Statement, are

attached hereto as Exhibit B. The Debtor has calculated the liquidation value of each asset as shown below. The Debtor arrived at the net liquidation values that are subject to liens by deducting from the value of the assets the amount of the secured liens and any applicable sales costs, fees, and taxes.

Net liquidation value of Debtors’ assets $

Less estimated chapter 7 trustee expenses $ )

Less administrative claims and
priority tax claims (see Article I of Plan) $ )

Less Other Priority Claims (see Article II of Plan) $ )

Liquidation value available to
general unsecured creditors $

Divide by estimated amount of allowed general unsecured
claims (see Article II, Class 6 of Plan; Exhibit C) $

Equals estimated percentage of their allowed claims
that general unsecured creditors would receive in
a liquidation of the Debtor %

Estimated percentage of claims general unsecured
creditors would receive under Debtor’s proposed Plan %

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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Part 5 Feasibility

The Plan cannot be confirmed unless the court finds it feasible. A Plan is feasible if confirmation of the Plan is not

likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtor, unless such liquidation or reorganization is proposed in the Plan.

Feasibility by the Effective Date. The Debtor estimates that the Debtor will have sufficient cash on hand on the

Effective Date to pay all claims and expenses entitled to be paid in cash on such date, as shown below.

Cash Debtor will have on hand by Effective Date: $
Less:
Administrative claims: $
Statutory costs and charges: $
Other Plan payments payable on Effective Date: $

Balance after paying these amounts: $

The sources of cash the Debtor will have on hand by the Effective Date, as shown above are:

Cash on Hand $

Sale of assets $

Additional cash the Debtor will accumulate from projected
disposable income between now and Effective Date + $

Borrowing from: + $

Other: + $

Total $

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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Feasibility over the life of the Plan. The Debtor has, and projects that the Debtor will receive, enough cash over the life of the Plan to make the required Plan payments based on the sources described above. See Exhibit A attached hereto.

Date: Signature of Debtor

Printed name of Debtor

Date: Signature of attorney for Debtor, if any

Printed name of attorney for Debtor, if any

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

Date Signature of Debtor

List of Exhibits

Exhibit A: Declarations of current/postpetition income and expenses, prepared as of . List of expenses shall include a list of proposed plan payments

Exhibit B: Schedules A and B, as adjusted to provide liquidation values and with appendices describing valuation methods

Exhibit C: General unsecured claims (indicate next to each creditor whether or not claims are disputed) (Class 6)

Exhibit D: Ballot

Exhibit E: Executory contracts and unexpired leases to be assumed

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is:

A true and correct copy of the foregoing document entitled: INDIVIDUAL DEBTOR’S DISCLOSURE STATEMENT IN SUPPORT OF PLAN OF REORGANIZATION will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below:

1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On (date) , I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the

following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated below:

Service information continued on attached page

2. SERVED BY UNITED STATES MAIL: On (date) , I served the following persons and/or entities at the last known addresses in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed.

   Service information continued on attached page

3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) , I served the following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is filed.

   Service information continued on attached page

I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

Date Printed Name Signature

This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California.

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