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

A “voting plan” in a Chapter 11 bankruptcy is a plan that creditors and the debtor, or person who initiated the bankruptcy proceedings, must agree to. It is a plan that dictates how creditors will be paid and how the debt will be restructured. The plan is proposed by the debtor and must be approved by a majority of the creditors and then affirmed by the court. The voting plan outlines the payout of the creditors, which classes of creditors will be paid, and the restructuring of the debt. All creditors must agree to the plan before it is approved. Creditors can either vote for or against the plan depending on their level of agreement. If the plan is accepted, the debtor can then move forward with the repayment of creditors in the form outlined by the plan. If the majority of creditors reject the plan, the debtor can modify the plan and submit it for a second vote. The voting process can continue until a majority of creditors agree to a plan. If no plan is approved, the bankruptcy case may be dismissed by the court. In order for the voting plan to be approved by the court, it must comply with Chapter 11 bankruptcy law in North Dakota. The court must also be assured that the plan is fair, equitable, feasible, and in the best interest of all creditors. If the court approves the plan, the debt will be restructured and repayment to creditors will begin. This allows the debtor to satisfy their debts without having to liquidate assets or personal income.

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

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