reorganization plan

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Reorganization Plan

In chapter 11 bankruptcy, a plan filed with bankruptcy court describing the process of how an insolvent company will change structurally to help it pay its debts and stay in business. This plan is subject to court oversight to ensure enforcement. Depending upon the specific plan, a company's original owner or managers may maintain control. Other times, the company's creditors become the new owners of the business; this especially happens when one or more creditors have had their debt completely discharged. Changes also must occur structurally, perhaps in risk management or marketing or perhaps in something more fundamental, to ensure that the bankruptcy does not repeat itself.

reorganization plan

A plan filed with a bankruptcy court judge by a company in Chapter 11 proceedings in which the disbursement of assets is stipulated. The plan must be approved by the firm's creditors and by the court. A reorganization plan results in new securities being given to creditors in trade for old securities.
References in periodicals archive ?
361(a), a corporation exchanging property, pursuant to a reorganization plan, solely for stock or securities recognizes neither gain nor loss.
The motion states that a reorganization plan for Columbia Transmission is being finalized and is expected to be filed before the end of the requested 120-day extension period.
Under the Settlement Agreement, the proposed reorganization plan filed by the Official Equity Committee will be withdrawn, and the parties have agreed to continue with the consummation of the purchase of PRC-MO by Pinnacle and to support the amended reorganization plan filed by PRC-MO.
Since the reorganization plan was arranged to produce two viable corporations, the expenses incurred in carrying out the division (including legal expenses) were nondeductible capital expenditures; they added to the value of the capital structure of both the original corporation and the successor corporation.
OTCBB:NMKT) today released a letter to shareholders providing further detail regarding the previously announced reorganization plan with Intercell International Corporation (OTCBB:IICPQ).
Company officials said the extension will provide time to analyze the more than 14,000 claims filed by creditors and to continue negotiations with creditors aimed at resolving fundamental issues and formulating consensual reorganization plans.
He has assisted clients in bankruptcy planning, business plan preparation and review, cash flow projections, liquidation analyses, business valuations, and in the development and negotiation of reorganization plans.
We have sufficient funding to last until the end of the year, and the assurance of at least one reorganization plan that will keep the Company as an ongoing entity," said Robert L.
An amended reorganization plan will be developed to distribute any remaining sale proceeds to remaining creditors.
According to Chairman and CEO David Nichols, the filing was a necessary first step in the company's reorganization plans.
While shares of Old ICO may remain outstanding until the liquidation is complete, the existing common shares of Old ICO no longer have any value other than the value of the shares and warrants being received under the reorganization plans.
It added that for the reorganization plans to become effective, they must be approved by the court, after a vote by the creditors and other constituencies which may be deemed necessary by the court.