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

A "voting plan" in a Chapter 11 bankruptcy is a document that defines the rules and procedures by which creditors and equity holders (or owners) of a business vote on the reorganization plan that is proposed in the bankruptcy. The voting plan outlines how much each creditor and equity holder will receive if the plan is approved. It also explains how the vote will be conducted and how the results will be determined. The voting plan is part of the reorganization plan, which is a document that outlines how the company plans to restructure its operations and pay off its debts. The goal of the reorganization plan is to provide the maximum benefit to all creditors while also allowing the business to continue operating. Before voting on the reorganization plan, creditors and equity holders must agree on the voting plan. This agreement is called a “consent decree” and must be filed with the court. The voting plan must be approved by the court before any vote is held. In Washington, a voting plan must be approved by at least two-thirds of the creditors and equity holders in order to be approved by the court. Once the voting plan is approved, creditors and equity holders will vote on the reorganization plan in accordance with the provisions of the voting plan. The results of the vote will determine whether the plan will be approved and the reorganization process can begin.

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

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