lev-os 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
- Case details — debtor name, case number, court, filing date
- Plan of Reorganization — final or near-final draft
- Financial records — P&L, balance sheets, cash flow (min. 3 years)
- Schedules and SOFA — filed schedules of assets/liabilities, statement of financial affairs
- Asset appraisals — valuations for significant estate property
- Exit financing — term sheets, LOIs, or DIP financing terms
- Claims register or bar date order — for creditor classification
- Executory contracts/leases — with assume/reject decisions
Quick Start
- Gather all prerequisites; confirm Plan draft is near-final
- Draft sections 1–8 below, cross-checking every figure against the Plan
- Run the guidelines checklist before finalizing
- 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