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Ch. 11 Case Shows Why Plan Acceptance Procedures Are Key

April 2024
Region: Americas
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This article was originally published on April 23, 2024, by Law360, and is republished here with permission.


As seen in the recent proliferation of bankruptcy cases seeking a structured dismissal or conversion after a successful sale, debtors constantly seek creative and efficient ways to wind up a case, including through a traditional plan of liquidation.

Yet, as discussed, debtors must ensure that any proposed voting procedures for a plan comply with Section 1126 of the U.S. Bankruptcy Code, or are at least supported by, or supportable with, prior precedent.

Otherwise, notwithstanding a debtor's creativity and intent to further benefit a creditor class, such voting procedures must be denied.