Chapter 11 Bankruptcy allows a business to develop a plan of reorganization. The Chapter 11 bankruptcy reorganization plan must have certain mandatory provisions including a classification for all claims (secured vs. Unsecured Claim). All claims must be placed in a class with other claims which are substantially similar to one another. To be considered unimpaired, a class must not alter the rights of the claim holders either legally, contractually or equitably (See 11 USC § 1124(1)). Under 11 USC § 1123(a)(4), and all claims of a particular class must be provided the same treatment under the Chapter 11 Bankruptcy plan (unless the holders of the claim have agreed to less favorable treatment).
If a claim is impaired the plan must identify a treatment for each impaired class. Classes which are not impaired are presumptively assumed to be accepted by the class and by claim holders which have a claim. The Chapter 11 Bankruptcy plan must also 1) outline the method for implementing the plan of reorganization 2) provide a provision for the Debtor corporation not allowing non-voting stock and 3) allow for director and officer selections which are consistent with interest of the creditors. The Chapter 11 Bankruptcy reorganization plan is generally not accepted until after it has been accepted by the creditors. Under some conditions if a Chapter 11 Bankruptcy reorganization plans are not approved by the creditors they may be subsequently approved through a "cram down" (See Cramdown).