CACB — Plan of Reorganization for Small Business Under Chapter 11

Source: https://www.cacb.uscourts.gov/sites/cacb/files/documents/forms/b_425a_.pdf

Fill in this information to identify the case:

Debtor Name __________________________________________________________________ United States Bankruptcy Court for the:_______________________ District of __________ (State)

Case number: _________________________

Check if this is an amended filing

Official Form 425A

Plan of Reorganization for Small Business Under Chapter 11 02/20

[Name of Proponent ]’s Plan of Reorganization, Dated [Insert Date]

[If this plan is for a small business debtor under Subchapter V, 11 U.S.C. § 1190 requires that it include “(A) a brief history of the business operations of the debtor; (B) a liquidation analysis; and (C) projections with respect to the ability of the debtor to make payments under the proposed plan of reorganization.” The Background section below may be used for that purpose. Otherwise, the Background section can be deleted from the form, and the Plan can start with “Article 1: Summary”]

Background for Cases Filed Under Subchapter V

A. Description and History of the Debtor’s Business The Debtor is a [corporation, partnership, etc.]. Since [insert year operations commenced], the Debtor has been in the business of __________________________________________. [Describe the Debtor’s business].

B. Liquidation Analysis To confirm the Plan, the Court must find that all creditors and equity interest holders who do not accept the Plan will receive at least as much under the Plan as such claim and equity interest holders would receive in a chapter 7 liquidation. A liquidation analysis is attached to the Plan as Exhibit___.

C. Ability to make future plan payments and operate without further reorganization The Plan Proponent must also show that it will have enough cash over the life of the Plan to make the required Plan payments and operate the debtor’s business.

The Plan Proponent has provided projected financial information as Exhibit ___.

The Plan Proponent’s financial projections show that the Debtor will have projected disposable income (as defined by § 1191(d) of the Bankruptcy Code) for the period described in § 1191(c)(2) of $ _________.

The final Plan payment is expected to be paid on _________.

[Summarize the numerical projections, and highlight any assumptions that are not in accord with past experience. Explain why such assumptions should now be made.] You should consult with your accountant or other financial advisor if you have any questions pertaining to these projections.

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 1

Debtor Name _______________________________________________________ Case number_____________________________________

Article 1: Summary

This Plan of Reorganization (the Plan) under chapter 11 of the Bankruptcy Code (the Code) proposes to pay
creditors of [insert the name of the Debtor] (the Debtor) from [Specify sources of payment, such as an infusion of capital, loan
proceeds, sale of assets, cash flow from operations, or future income].
This Plan provides for: classes of priority claims;
classes of secured claims;
classes of non-priority unsecured clams; and
classes of equity security holders.

Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this
Plan has valued at approximately __ cents on the dollar. This Plan also provides for the payment of
administrative and priority claims.
All creditors and equity security holders should refer to Articles 3 through 6 of this Plan for information
regarding the precise treatment of their claim. A disclosure statement that provides more detailed information
regarding this Plan and the rights of creditors and equity security holders has been circulated with this Plan.
Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you
have one. (If you do not have an attorney, you may wish to consult one.)

Article 2: Classification of Claims and Interests

2.01 Class 1 ................................ All allowed claims entitled to priority under § 507(a) of the Code (except administrative expense claims under § 507(a)(2), [“gap” period claims in an involuntary case under § 507(a)(3),] and priority tax claims under § 507(a)(8)). [Add classes of priority claims, if applicable] 2.02 Class 2 ................................... The claim of ________________________________ , to the extent allowed as a secured claim under § 506 of the Code.

[Add other classes of secured creditors, if any. Note: Section 1129(a)(9)(D) of the Code provides that a secured tax claim which would otherwise meet the description of a priority tax claim under § 507(a)(8) of the

Code is to be paid in the same manner and over the same period as prescribed in § 507(a)(8).]

2.03 Class 3 ................................... All non-priority unsecured claims allowed under § 502 of the Code. [Add other classes of unsecured claims, if any.]

2.04 Class 4 ................................... Equity interests of the Debtor. [If the Debtor is an individual, change this heading to The interests of the individual Debtor in property of the estate.]

Article 3: Treatment of Administrative Expense Claims, Priority Tax Claims, and Quarterly and Court Fees

Under section § 1123(a)(1), administrative expense claims, [“gap” period claims in an3.01 Unclassified claims
involuntary case allowed under § 502(f) of the Code,] and priority tax claims are not in classes.

Each holder of an administrative expense claim allowed under § 503 of the Code, [and3.02 Administrative expense
a “gap” claim in an involuntary case allowed under § 502(f) of the Code,] will be paid in full on the claims
effective date of this Plan, in cash, or upon such other terms as may be agreed upon
by the holder of the claim and the Debtor.
Or
Each holder of an administrative expense claim allowed under § 503 of the Code, [and
a “gap” claim in an involuntary case allowed under § 502(f) of the Code,] will be paid [specify terms of
treatment, including the form, amount, and timing of distribution, consistent with section 1191(e) of the

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 2

Debtor Name _______________________________________________________ Case number_____________________________________

Code].

[Note: the second provision is appropriate only in a subchapter V plan that is confirmed non-consensually

under section 1191(b).]

Each holder of a priority tax claim will be paid [Specify terms of treatment consistent3.03 Priority tax claims with § 1129(a)(9)(C) of the Code].

All fees required to be paid under 28 U.S.C. § 1930 that are owed on or before the3.04 Statutory fees

effective date of this Plan have been paid or will be paid on the effective date.

All quarterly fees required to be paid under 28 U.S.C. § 1930(a)(6) or (a)(7) will accrue3.05 Prospective quarterly fees

and be timely paid until the case is closed, dismissed, or converted to another chapter of the Code.

Article 4: Treatment of Claims and Interests Under the Plan

4.01 Claims and interests shall be treated as follows under this Plan:

Class Impairment Treatment Class 1 - Priority claims Impaired [Insert treatment of priority claims in this Class, including the excluding those in Article 3 form, amount and timing of distribution, if any. Unimpaired For example: “Class 1 is unimpaired by this Plan, and each holder of a Class 1 Priority Claim will be paid in full, in cash, upon the later of the effective date of this Plan, or the date on which such claim is allowed by a final non-appealable order. Except: ________.”] [Add classes of priority claims if applicable] Class 2 – Secured claim of Impaired [Insert treatment of secured claim in this Class, including [Insert name of secured the form, amount and timing of distribution, if any.] creditor.] Unimpaired [Add classes of secured claims if applicable] Class 3 – Non-priority Impaired [Insert treatment of unsecured creditors in this Class, unsecured creditors including the form, amount and timing of distribution, if any.] Unimpaired [Add administrative convenience class if applicable]

Class 4 - Equity security Impaired [Insert treatment of equity security holders in this Class,
holders of the Debtor including the form, amount and timing of distribution, if any.]
Unimpaired
Article 5: Allowance and Disallowance of Claims

A disputed claim is a claim that has not been allowed or disallowed [by a final non-5.01 Disputed claim appealable order], and as to which either: (i) a proof of claim has been filed or deemed filed, and the Debtor or another party in interest has filed an objection; or (ii) no proof of claim has been filed, and the Debtor has scheduled such claim as disputed, contingent, or unliquidated. 5.02 Delay of distribution on a No distribution will be made on account of a disputed claim unless such claim is disputed claim allowed [by a final non-appealable order]. 5.03 Settlement of disputed The Debtor will have the power and authority to settle and compromise a disputed claims claim with court approval and compliance with Rule 9019 of the Federal Rules of Bankruptcy Procedure. Article 6: Provisions for Executory Contracts and Unexpired Leases

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 3

Debtor Name _______________________________________________________ Case number_____________________________________

(a) The Debtor assumes, and if applicable assigns, the following executory6.01 Assumed executory
contracts and unexpired leases as of the effective date: contracts and unexpired
leases [List assumed, or if applicable assigned, executory contracts and unexpired leases.]

(b) Except for executory contracts and unexpired leases that have been assumed,
and if applicable assigned, before the effective date or under section 6.01(a) of
this Plan, or that are the subject of a pending motion to assume, and if
applicable assign, the Debtor will be conclusively deemed to have rejected all
executory contracts and unexpired leases as of the effective date.
A proof of a claim arising from the rejection of an executory contract or
unexpired lease under this section must be filed no later than __________ days
after the date of the order confirming this Plan.

Article 7: Means for Implementation of the Plan

[Insert here provisions regarding how the plan will be implemented as required under § 1123(a)(5) of the
Code. For example, provisions may include those that set out how the plan will be funded, including any
claims reserve to be established in connection with the plan, as well as who will be serving as directors,
officers or voting trustees of the reorganized Debtor.]

Article 8: General Provisions

The definitions and rules of construction set forth in §§ 101 and 102 of the8.01 Definitions and rules of
Code shall apply when terms defined or construed in the Code are used in construction
this Plan, and they are supplemented by the following definitions:
[Insert additional definitions if necessary].

The effective date of this Plan is the first business day following the date that8.02 Effective date
is 14 days after the entry of the confirmation order. If, however, a stay of the
confirmation order is in effect on that date, the effective date will be the first
business day after the date on which the stay expires or is otherwise
terminated.

If any provision in this Plan is determined to be unenforceable, the8.03 Severability
determination will in no way limit or affect the enforceability and operative
effect of any other provision of this Plan.

The rights and obligations of any entity named or referred to in this Plan will8.04 Binding effect
be binding upon, and will inure to the benefit of the successors or assigns of
such entity.

The headings contained in this Plan are for convenience of reference only and8.05 Captions
do not affect the meaning or interpretation of this Plan.

Unless a rule of law or procedure is supplied by federal law (including the[8.06 Controlling effect
Code or the Federal Rules of Bankruptcy Procedure), the laws of the State of
____________ govern this Plan and any agreements, documents, and
instruments executed in connection with this Plan, except as otherwise
provided in this Plan.]

[If the Debtor is a corporation include provisions required by § 1123(a)(6) of the Code.][8.07 Corporate governance

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 4

Debtor Name _______________________________________________________ Case number_____________________________________

Language addressing the extent and the scope of the bankruptcy court’s jurisdiction[8.08 Retention of Jurisdiction after the effective date of the plan.]

Article 9: Discharge

[Include the appropriate provision in the Plan]

[No Discharge -- Section 1141(d)(3) IS applicable.]

In accordance with § 1141(d)(3) of the Code, the Debtor will not receive any discharge of debt in this bankruptcy case.

[Discharge -- Section 1141(d)(3) IS NOT applicable; use one of the alternatives below]

[The following 3 alternatives apply to cases in which a discharge is applicable and the Debtor DID NOT elect to proceed under Subchapter V of Chapter 11.]

[Discharge if the Debtor is an individual and did not proceed under Subchapter V] Confirmation of this Plan does not discharge any debt provided for in this Plan until the court grants a discharge on completion of all payments under this Plan, or as otherwise provided in § 1141(d)(5) of the Code. The Debtor will not be discharged from any debt excepted from discharge under § 523 of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure.

[Discharge if the Debtor is a partnership and did not proceed under Subchapter V] On the effective date of this Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in § 1141(d)(1)(A) of the Code. The Debtor will not be discharged from any debt imposed by this Plan.

[Discharge if the Debtor is a corporation and did not proceed under Subchapter V] On the effective date of this Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in § 1141(d)(1)(A) of the Code, except that the Debtor will not be discharged of any debt: (i) imposed by this Plan; or (ii) to the extent provided in § 1141(d)(6).

[The following 3 alternatives apply to cases in which the Debtor DID elect to proceed under Subchapter V of Chapter 11.]

[Discharge if the Debtor is an individual under Subchapter V]

If the Debtor’s Plan is confirmed under § 1191(a), on the effective date of the Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in § 1141(d)(1)(A) of the Code. The Debtor will not be discharged from any debt: (i) imposed by this Plan; or (ii) excepted from discharge under § 523(a) of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure.

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 5

Debtor Name _______________________________________________________ Case number_____________________________________

If the Debtor’s Plan is confirmed under § 1191(b), confirmation of the Plan does not discharge any debt provided for in this Plan until the court grants a discharge on completion of all payments due within the first 3 years of this Plan, or as otherwise provided in § 1192 of the Code. The Debtor will not be discharged from any debt: (i) on which the last payment is due after the first 3 years of the plan, or as otherwise provided in § 1192; or (ii) excepted from discharge under § 523(a) of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure.

[Discharge if the Debtor is a partnership under Subchapter V]

If the Debtor’s Plan is confirmed under § 1191(a), on the effective date of the Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in § 1141(d)(1)(A) of the Code. The Debtor will not be discharged from any debt imposed by this Plan.

If the Debtor’s Plan is confirmed under § 1191(b), confirmation of the Plan does not discharge any debt provided for in this Plan until the court grants a discharge on completion of all payments due within the first 3 years of this Plan, or as otherwise provided in § 1192 of the Code. The Debtor will not be discharged from any debt: (i) on which the last payment is due after the first 3 years of the plan, or as otherwise provided in § 1192; or (ii) excepted from discharge under § 523(a) of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure.

[Discharge if the Debtor is a corporation under Subchapter V]

If the Debtor’s Plan is confirmed under § 1191(a), on the effective date of the Plan, the Debtor will be discharged from any debt that arose before confirmation of this Plan, to the extent specified in § 1141(d)(1)(A) of the Code, except that the Debtor will not be discharged of any debt: (i) imposed by this Plan; or (ii) to the extent provided in § 1141(d)(6).

If the Debtor’s Plan is confirmed under § 1191(b), confirmation of this Plan does not discharge any debt provided for in this Plan until the court grants a discharge on completion of all payments due within the first 3 years of this Plan, or as otherwise provided in § 1192 of the Code. The Debtor will not be discharged from any debt: (i) on which the last payment is due after the first 3 years of the plan, or as otherwise provided in § 1192; or (ii) excepted from discharge under § 523(a) of the Code, except as provided in Rule 4007(c) of the Federal Rules of Bankruptcy Procedure.

Article 10: Other Provisions

[Insert other provisions, as applicable.]

Respectfully submitted,

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 6

Debtor Name _______________________________________________________ Case number_____________________________________

____________________________________________________ ____________________________________________________
[Signature of the Plan Proponent] [Printed Name]
____________________________________________________ ____________________________________________________
[Signature of the Attorney for the Plan Proponent] [Printed Name]

Official Form 425A Plan of Reorganization for Small Business Under Chapter 11 page 7