How is a liquidating plan approved in a Chapter 11 bankruptcy?

A liquidating plan is a special type of restructuring plan that is used in Chapter 11 bankruptcy proceedings to liquidate, or sell off, the assets of a company for cash instead of reorganizing the company and allowing it to remain in operation. The liquidating plan must be approved by the court in order for it to be put into effect. In order for a liquidating plan to be approved in a Chapter 11 bankruptcy in Minnesota, the debtor, or the individual or company filing for bankruptcy, must first submit a disclosure statement that sets forth the terms of the plan and provides all of the relevant facts regarding the liquidation. The debtor must then file a motion requesting the court to approve the plan. The court may then hold a hearing to consider the motion. At the hearing, the court must consider whether the proposed plan complies with the requirements of the Bankruptcy Code and whether it is feasible and in the best interest of the creditors. If the plan is approved, the court will enter an order confirming the plan. The confirmation order will set out the details of the plan and how it will be implemented. Once the plan is approved, the debtor is obligated to comply with its terms.

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How is a liquidating plan approved in a Chapter 11 bankruptcy?

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