What is a “voting plan” in a Chapter 11 bankruptcy?

A “voting plan” in a Chapter 11 bankruptcy is a plan that is proposed by the debtor, which outlines how creditors will be paid back a portion of what they are owed. It is proposed as part of the reorganization plan and must be approved by a majority of creditors. In order for this plan to be approved, it must be proven to be the best available option for the creditors. The creditors will then vote on the plan. If the majority of creditors vote to accept it, then the plan is approved and the bankruptcy proceeds. If the creditors vote against the plan, then the debtor must typically go to court and ask for the plan to be approved by a judge. The judge will look at the facts of the case and evaluate whether the plan is fair and equitable to all parties involved. If approved by the court, then the plan will go into effect. A voting plan is an important part of the bankruptcy process in Missouri. It is the first step of reorganization and helps creditors recover as much of what they are owed as possible. Without a voting plan, it is difficult for creditors to get back what they are owed and the bankruptcy process is much more complicated.

Related FAQs

What is a “voting plan” in a Chapter 11 bankruptcy?

Related FAQs

Related Blog Posts