Development, Presentation and Confirmation of the Plan

One of the primary objectives of a company in bankruptcy is to develop a business plan and negotiate with its creditors to formulate a reorganization plan. The company has the exclusive right by law to propose such a plan of reorganization during the first 120 days of the Chapter 11 process. If the company is proceeding in good faith, the exclusive period may be, and usually is, extended by the Bankruptcy Court, up to a maximum period of 18 months. Once the Plan of Reorganization is formulated and documented, it will be filed with the Bankruptcy Court.

The Debtor will present a Disclosure Statement to the Court and creditors, along with the Plan of Reorganization. The Disclosure Statement contains complete financial information and also explains the company's proposed plan for paying its creditors. The Bankruptcy Court will determine whether the Disclosure Statement contains adequate information for the creditors to decide whether to vote to accept or reject the Plan of Reorganization. If the Disclosure Statement is approved by the Court, the company will then send it, along with the proposed Plan of Reorganization and a ballot, to all creditors and interest holders in the company. Those parties can then vote on the Reorganization Plan by an announced voting deadline.

If the required number of interested parties votes in favor of the plan, the company will then seek Bankruptcy Court approval, or confirmation, of its Plan of Reorganization. If the plan is confirmed by the Court, the claims of creditors will be satisfied as provided for in the plan. At this point, the company can emerge from Chapter 11 as a reorganized company and operate its business as described in its Plan of Reorganization.

MainStream's team of specialists will assist in the development of pre-filing strategies, as well as preparing the reorganization plan in concert with management. Generally we advise and/or participate in presentation of the plan to the Court and committees, and then serve as a voice of reason and represent the company from a business perspective in gaining confirmation of the reorganization plan.


>