Draft Plan Of Reorganization

Skill: Draft Chapter 11 Plan of Reorganization

1. Subject-matter triage

• Treat the plan as the primary deliverable and the confirmability memo as secondary. Draft the plan first, confirm it is populated with operative provisions, then prepare the issues memo.
• Identify all stakeholder groups, claims, interests, facilities, and transaction milestones that appear in the source set before drafting treatment language.
• If the source set contains multiple possible class schemes, valuation paths, financing structures, or release packages, enumerate the candidate structures first and then select or reconcile them.

2. Failure modes the skill is correcting

• The plan omits a class, leaves a claim category uncaptured, or uses labels that are inconsistent across documents.
• Treatment provisions are generic, do not track the source materials, or fail to state consideration, timing, impairment, and voting consequences for each class.
• Confirmation vulnerabilities are not surfaced in the memo, especially where the source documents conflict on valuation, priority, cure amounts, governance, releases, or exit mechanics.
• The draft assumes a clean capital structure when the source materials show disputed claims, intercompany balances, or contingent liabilities.
• The plan states legal conclusions without tying them to the governing Bankruptcy Code provisions, Federal Rules, or recognized confirmation doctrines.
• The memo diagnoses issues without pairing each one with a concrete resolution path and timing-sensitive next step.
• The drafting leaves out operational details needed to implement the reorganization, such as effective-date conditions, distribution mechanics, contract assumptions, or tax handling.
• The output reads like a summary of the reorganization rather than a usable plan and companion risk memo.

3. Legal frameworks / domain conventions that apply

• Use Chapter 11 plan architecture under the Bankruptcy Code, especially 11 U.S.C. §§ 1122, 1123, 1126, 1129, 1141, and, where relevant, §§ 365, 503, 507, 510, 524, and 1125.
• Classify claims and interests by legal nature and treatment, not by convenience; separately address secured claims, priority claims, general unsecured claims, intercompany claims, equity interests, and any other classes supported by the source materials.
• For each class, state whether it is impaired, what it receives, when it receives it, and whether it votes; if a class is unimpaired, say so with the statutory rationale.
• Include at least one impaired accepting class if the source set supports it, and frame any acceptance analysis by reference to the Bankruptcy Code’s acceptance rules rather than by implication.
• Where junior stakeholders retain value, analyze absolute priority under 11 U.S.C. § 1129(b)(2) and any new value theory or contribution structure the plan relies on.
• If the plan contemplates a litigation trust, asset trust, or causes-of-action reserve, define the corpus, trustee selection, beneficiary rights, and distribution waterfall with internal consistency.
• If management incentive equity is included, specify dilution source, vesting, allocation, and who bears the dilution, and test it against the confirmed capital structure.
• Address cancellation of debt income, tax attribute treatment, ownership-change limits, and related bankruptcy tax consequences where the source materials indicate tax sensitivity.
• Conditions precedent to effectiveness should be concrete, objective, and tied to a milestone, order, or closing deliverable rather than left aspirational.
• Any release, exculpation, injunction, or discharge concept should be tied to recognized confirmation and post-effective-date authority and drafted narrowly enough to survive scrutiny.

4. Analytical scaffolds

• Draft the plan in conventional bankruptcy order: definitions; classification and treatment; means of implementation; financing or exit facility if applicable; executory contracts and unexpired leases; releases, exculpation, and discharge; conditions to effectiveness; governance; distributions; tax; miscellaneous.
• For each class, map: claim or interest description, source-document support, treatment, impairment, voting consequence, and implementation mechanics.
• When source documents diverge, identify the divergence, choose the operative formulation only if supported, and flag the unresolved point in the issues memo.
• For each issue in the memo, state: what the issue is, why it matters under the governing confirmation rule, and what resolution would cure or reduce the risk.
• Treat timing as substantive: file date, solicitation date, effective date, cure objection deadlines, distribution timing, and closing conditions should be aligned across the plan and memo.
• Use source-document terminology where possible, but normalize inconsistent labels so the plan reads as a coherent operative document.
• If multiple stakeholder groups or claim pools are in play, analyze them separately rather than collapsing them into a single blended treatment.

5. Vertical / structural / temporal relationships

• Preserve the hierarchy from estate-level restructuring to class-level treatment to holder-level mechanics.
• Keep vertical consistency between the plan, disclosure materials, support agreements, financing documents, and any exhibits or schedules referenced in the source set.
• Track how treatment changes over time: petition date rights, record date rights, effective-date rights, deferred distributions, and post-effective-date governance should be distinct.
• Where the plan shifts value down the capital structure, make the ordering explicit and test whether any junior recovery depends on senior consent, contribution, or litigation settlement.
• If the plan uses a trust or reserve, define the flow from estate property into the vehicle, then from the vehicle to beneficiaries, and separate administrative expenses from distributable proceeds.
• If distributions depend on future determinations, specify the adjudicative or administrative process and identify who bears interim uncertainty.
• Where contract cures, assumed liabilities, or allowed claims affect distributions, connect those mechanics to the relevant timing and objection process.

6. Output structure conventions

• Produce two standalone deliverables: a plan of reorganization and a companion plan issues memo.
• The plan should read as an operative Chapter 11 plan, not a narrative summary, and should contain complete provisions capable of insertion into a filed document.
• The memo should use a numbered issue format with a defined severity scale stated up front and applied uniformly to each item.
• Each memo entry should include: issue description, confirmability risk, controlling authority or governing rule, and recommended resolution.
• End the memo with a concise Recommended Actions section that assigns an action, the responsible role, and a timing anchor tied to the filing, solicitation, confirmation, or effective-date timeline.
• Use ordinary bankruptcy-plan headings and subheadings; do not mirror any hidden checklist structure.
• Before finishing, verify that the plan file is populated with operative clauses and that the memo file identifies the principal risks and fixes rather than merely describing them.