A disclosure statement is a document given to each Creditor which must be reviewed prior to approving a Chapter 11 Bankruptcy reorganization plan.
Disclosure Statements should be reviewed by the creditor's attorneys and will not tell all parties everything they need to know about their rights, but under bankruptcy law, the Disclosure Statement must contain "adequate information" which is outlined in Code Section 1125(a) as "information of a kind and in sufficient detail that would enable a reasonable investor typical of holders of claims or interests to make an informed judgment about accepting or rejecting the Plan". Each creditor who has filed a proof of claim against the debtor or who has been listed on the debtor's schedule will receive a Disclosure Statement.