reorganization plan

(redirected from Plan of Reorganization)
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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.
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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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
As contemplated by the company's plan of reorganization, Intermet has become a Delaware corporation.
Under the confirmed plan of reorganization, the company's unsecured class of creditors that includes its existing convertible notes will receive new notes with a total principal amount of $30 million.
Under the plan of reorganization, the company's existing bank debt is to be canceled as of the effective date in favor of a new credit facility, Conseco said.
The loan would be secured by inventory and would replace the chain's current $2 billion debtorin-possession facility on the date the plan of reorganization takes effect.
The automatic stay prevents a "race to the bankruptcy courthouse" and gives the debtor room to concentrate on stabilizing its business, developing a new business plan, and formulating a plan of reorganization.
The Prudential Insurance Company of America, the carrier that underwrites the various insurance programs sponsored by the AICPA Insurance Trust, recently filed its Plan of Reorganization with the New Jersey Department of Banking and Insurance.
The court has scheduled a confirmation hearing on CRIIMI MAE's third amended joint plan of reorganization for November 15.
"We are delighted to have concluded our auction process and, as a result, to have finalized our agreement with Wellspring and filed our amended plan of reorganization with the bankruptcy court," comments Paragon chief executive officer Bobby Abraham.
Under Bradlees' plan of reorganization, proceeds from the sale will be used to pay down the Company's 9 percent convertible notes.
As explained in the preamble, the cases are read as holding that if T transfers its assets to an acquiring corporation (P) in exchange for stock of the corporation controlling P (as in Groman), or if P acquires the T assets but pursuant to the plan of reorganization transfers them to a controlled subsidiary (as in Bashford), the continuity-of-interest doctrine is not satisfied.
During the final negotiations leading to the draft plan of reorganization, as many as 40 attorneys assisted the seven stakeholders and the debtor principals.