--- name: disclosure-statement-plan-reorganization title: Disclosure Statement for Plan of Reorganization description: Drafts a Chapter 11 Disclosure Statement compliant with 11 U.S.C. § 1125 and FRBP 3016(b). Use when preparing the disclosure statement that accompanies a proposed reorganization plan, covering debtor background, class treatments, liquidation analysis, projections, risk factors, and voting procedures. author: CaseMark author_url: https://github.com/CaseMark/skills/tree/main/skills/legal/disclosure-statement-plan-reorganization license: Apache-2.0 version: 0.1.0 execution_mode: open jurisdiction: us practice: bankruptcy language: en tags: [drafting, litigation, pleading] --- # Disclosure Statement for Plan of Reorganization Drafts a § 1125-compliant disclosure statement providing "adequate information" to enable a hypothetical reasonable investor of each class to make an informed judgment about the proposed plan. ## Prerequisites 1. **Case details** — debtor name, case number, court, filing date 2. **Plan of Reorganization** — final or near-final draft 3. **Financial records** — P&L, balance sheets, cash flow (min. 3 years) 4. **Schedules and SOFA** — filed schedules of assets/liabilities, statement of financial affairs 5. **Asset appraisals** — valuations for significant estate property 6. **Exit financing** — term sheets, LOIs, or DIP financing terms 7. **Claims register or bar date order** — for creditor classification 8. **Executory contracts/leases** — with assume/reject decisions ## Quick Start 1. Gather all prerequisites; confirm Plan draft is near-final 2. Draft sections 1–8 below, cross-checking every figure against the Plan 3. Run the guidelines checklist before finalizing 4. Submit to court for approval under § 1125 — do not solicit votes until approval order is entered ## Output Structure ### 1. Introduction - Debtor, case number, court, petition date - State § 1125 "adequate information" standard - Section roadmap and cross-reference to Plan ### 2. Debtor Background | Element | Content | |---|---| | Corporate history | Formation, ownership, key subsidiaries | | Operations | Revenue streams, customers, geography | | Assets | Categories with current valuations | | Liabilities | Secured, priority, general unsecured — with amounts | | Events of distress | Precipitating factors (operational, market, structural) | ### 3. Class Treatment Summary | Class | Description | Impaired? | Treatment | Est. Recovery % | |---|---|---|---|---| | Admin/Priority | § 507 claims | No (deemed accept) | Paid in full on effective date | 100% | | Class 1 | Secured | [Yes/No] | [Cramdown / reinstatement / payoff] | [X%] | | Class 2 | General unsecured | Yes | [Pro rata / % payout / new equity] | [X%] | | Class 3 | Equity interests | [Yes/No] | [Retained / cancelled / new issuance] | [X%] | Flag which classes are deemed to accept (unimpaired) or reject (receive nothing) and do not vote. ### 4. Financial Projections and Feasibility - **Historical**: 3-year P&L, balance sheet, cash flow - **Projections**: 3–5 years — revenues, expenses, EBITDA, debt service - **Assumptions**: State explicitly (growth rate, cost savings, headcount, CapEx) - **Liquidation analysis**: Side-by-side Plan recovery vs. Chapter 7 proceeds per class (required) - **Feasibility**: Address § 1129(a)(11) — plan not likely followed by further liquidation or reorganization ### 5. Risk Factors - **Confirmation**: Feasibility challenges, fair-and-equitable objections, cramdown disputes - **Operational**: Customer concentration, regulatory exposure, key-person dependency - **Legal**: Pending litigation, preference/fraudulent transfer exposure, disputed claims - **Funding**: Exit financing contingencies, asset sale completion, DIP maturity ### 6. Implementation and Funding - **Sources**: Cash on hand, operations, asset sales, new equity, exit facility, litigation recoveries - **Exit financing details**: Lender, amount, conditions precedent, status - **Distribution timeline**: Effective date trigger, initial distribution, periodic schedule - **Executory contracts**: Table of assumed, assigned, and rejected — with rejection damage treatment - **Restructuring steps**: Entity mergers, asset transfers, new governance ### 7. Voting and Confirmation - **Voting deadline**: [DATE] - **Ballot submission**: Method, address, instructions - **Confirmation standards** (§ 1129): at least one impaired accepting class (excluding insiders); feasibility; good faith; fair and equitable to non-consenting classes - **Hearing**: Date, time, courtroom - **Objection deadline**: [DATE — typically 7 days before hearing per local rules] - **Effect**: Discharge of pre-petition debts; binding on all parties ### 8. Conclusion - Recommendation to vote in favor - Why Plan is superior to liquidation or competing plan - Counsel contact information - Forward-looking statement disclaimer ## Guidelines - **Plan consistency**: Every treatment, amount, and timing must match the Plan exactly — discrepancies are grounds for disapproval - **Plain language**: Class treatments must be readable by lay creditors; define all terms on first use - **Bluebook citations**: All statutory, rule, and case citations in proper format - **Source attribution**: Pinpoint-cite factual assertions to case record documents - **Liquidation analysis**: Must be prepared by a qualified financial advisor or state methodology — flag for client's financial professional - **Local rules**: Verify voting procedures, notice requirements, and objection deadlines against applicable district rules [VERIFY per district] - **Projections disclaimer**: Include forward-looking statement disclaimer per USTP guidelines - **§ 1125(d)**: Court must approve disclosure statement before vote solicitation — never solicit before approval order entry