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

When declaring Chapter 11 bankruptcy in Washington, a debtor must create a liquidating plan to be approved by creditors and the court. A liquidating plan is a way for the debtor to pay back their creditors over a set amount of time with specific repayment amounts and terms. In order for the liquidating plan to be approved, a majority of creditors must vote to accept the plan. When submitting the liquidating plan, the court must also approve it. The court will review the plan to make sure that it meets the requirements of the Bankruptcy Code. The court must also certify that the plan is fair and equitable to all creditors. This means that all creditors should be treated equally and that all of their legal rights must be respected. The court will also review any objections raised by the creditors to the liquidating plan. If the court believes that the objections are reasonable, the court may modify or reject the plan. The court must also consider any proposed amendments to the plan and determine if they are in the best interests of the creditors. In order for the liquidating plan to be approved, the court must find that it is feasible and in the best interests of the creditors. Once the court has approved the plan, it will be put into effect and the debtor must begin repaying their creditors according to the terms of the plan.

Related FAQs

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

Related FAQs

Related Blog Posts