Disclosure Statement

Disclosure Statement

A disclosure statement is a document given to each Creditor which must be reviewed prior to approving a Chapter 11 Bankruptcy reorganization plan.

The Disclosure Statement will document the following:

• The voters who are allowed to accept or object to the bankruptcy reorganization plan.
• The proposed treatment of a creditor's plan and how the amount received will differ from the amount received through a Liquidation
• Historical information about the Debtor and all relevant bankruptcy events
• Court considerations for determining whether or not the reorganization plan should be approved
• The effect of the confirmation of the reorganization plan
• The plan's feasibility

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.