United States Code

REFERENCES IN TEXT

The Railway Labor Act, referred to in subsec. (a), is act May 20, 1926, ch. 347, 44 Stat. 577, as amended. Title I of the Railway Labor Act is classified principal. ly to subchapter I (§ 151 et seq.) of chapter 8 of Title 45, Railroads. For complete classification of this Act to the Code, see section 151 of Title 45 and Tables.

EFFECTIVE DATE

Section 541(c) of Pub. L. 98-353 provided that: "The amendments made by this section [enacting this section] shall become effective upon the date of enactment of this Act [July 10, 1984]; provided that this section shall not apply to cases filed under title 11 of the United States Code which were commenced prior to the date of enactment of this section."

SUBCHAPTER II-THE PLAN

§ 1121. Who may file a plan

[See main edition for text of (a) and (b)]

(c) Any party in interest, including the debtor, the trustee, a creditors' committee, an equity security holders' committee, a creditor, an equity security holder, or any indenture trustee, may file a plan if and only if—

[See main edition for text of (1) and (2)]

(3) the debtor has not filed a plan that has been accepted, before 180 days after the date of the order for relief under this chapter, by each class of claims or interests that is impaired under the plan.

(d) On request of a party in interest made within the respective periods specified in subsections (b) and (c) of this section and after notice and a hearing, the court may for cause reduce or increase the 120-day period or the 180-day period referred to in this section.

(As amended Pub. L. 98-353, title III, § 506, July 10, 1984, 98 Stat. 385; Pub. L. 99–554, title II, § 283(u), Oct. 27, 1986, 100 Stat. 3118.)

AMENDMENTS

1986-Subsec. (d). Pub. L. 99-554 inserted reference to subsection (b) of this section.

1984-Subsec. (c)(3). Pub. L. 98-353, § 506(a), substituted "of claims or interests that is" for "the claims or interests of which are".

Subsec. (d). Pub. L. 98-353, § 506(b), inserted "made within the respective periods specified in subsection (c) of this section".

EFFECTIVE Date of 1986 AMENDMENT

Amendment by Pub. L. 99-554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99-554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1984 Amendment Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 307, 348, 1106, 1112 of this title.

§ 1122. Classification of claims or interests

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 901, 1123, 1127, 1222, 1322 of this title.

§ 1123. Contents of plan.

(a) Notwithstanding any otherwise applicable nonbankruptcy law, a plan shall—

(1) designate, subject to section 1122 of this title, classes of claims, other than claims of a kind specified in section 507(a)(1), 507(a)(2), or 507(a)(7) of this title and classes of interests;

(2) specify any class of claims or interests that is not impaired under the plan;

(3) specify the treatment of any class of claims or interests that is impaired under the plan;

[See main edition for text of (4)]

(5) provide adequate means for the plan's implementation, such as

[See main edition for text of (A) to (F)]
(G) curing or waiving of any default;

[See main edition for text of (H) to (J), (6) and (7)]

(b) Subject to subsection (a) of this section, a plan may

(1) impair or leave unimpaired any class of claims, secured or unsecured, or of interests;

(2) subject to section 365 of this title, provide for the assumption, rejection, or assignment of any executory contract or unexpired lease of the debtor not previously rejected under such section;

[See main edition for text of (3) to (5); (c)] (As amended Pub. L. 98-353, title III, § 507, July 10, 1984, 98 Stat. 385.)

AMENDMENTS

1984-Subsec. (a). Pub. L. 98-353, § 507(a)(1), in provisions preceding par. (1) substituted "Notwithstanding any otherwise applicable nonbankruptcy law, a" for "A".

Subsec. (a)(1). Pub. L. 98-353, § 507(a)(2), inserted a comma after "classes of claims" and substituted "507(a)(7) of this title," for "507(a)(6) of this title". Subsec. (a)(3). Pub. L. 98-353, § 507(a)(3), struck out "shall" before "specify the treatment".

Subsec. (a)(5). Pub. L. 98-353, § 507(a)(4), substituted "implementation" for "execution".

Subsec. (a)(5)(G). Pub. L. 98-353, § 507(a)(5), inserted "of" after “waiving".

Subsec. (b)(2). Pub. L. 98-353, § 507(b), substituted "rejection, or assignment" for "or rejection", and "under such section" for "under section 365 of this title".

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

§ 1124. Impairment of claims or interests

Except as provided in section 1123(a)(4) of this title, a class of claims or interests is impaired under a plan unless, with respect to each claim or interest of such class, the plan

(1) leaves unaltered the legal, equitable, and contractual rights to which such claim or in

terest entitles the holder of such claim or interest;

(2) notwithstanding any contractual provision or applicable law that entitles the holder of such claim or interest to demand or receive accelerated payment of such claim or interest after the occurrence of a default

(A) cures any such default that occurred before or after the commencement of the case under this title, other than a default of a kind specified in section 365(b)(2) of this title;

[See main edition for text of (B) to (D)]

(3) provides that, on the effective date of the plan, the holder of such claim or interest receives, on account of such claim or interest, cash equal to

(A) with respect to a claim, the allowed amount of such claim; or

(B) with respect to an interest, if applicable, the greater of—

(i) any fixed liquidation preference to which the terms of any security representing such interest entitle the holder of such interest; or

(ii) any fixed price at which the debtor, under the terms of such security, may redeem such security from such holder. (As amended Pub. L. 98-353, title III, § 508, July 10, 1984, 98 Stat. 385.)

AMENDMENTS

1984-Par. (2)(A). Pub. L. 98-353, § 508(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "cures any such default, other than a default of a kind specified in section 365(b)(2) of this title, that occurred before or after the commencement of the case under this title."

Par. (3)(B)(i). Pub. L. 98-353, § 508(2), substituted "or" for "and".

EFFECTIVE DATE OF 1984 AmendmenT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

§ 1125. Postpetition disclosure and solicitation (a) In this section

(1) "adequate information" means information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, that would enable a hypothetical reasonable investor typical of holders of claims or interests of the relevant class to make an informed judgment about the plan, but adequate information need not include such information about any other possible or proposed plan; and

(2) "investor typical of holders of claims or interests of the relevant class" means investor having

(A) a claim or interest of the relevant class;

(B) such a relationship with the debtor as the holders of other claims or interests of such class generally have; and

required by this section as holders of claims or interests in such class generally have.

[See main edition for text of (b) and (c)] (d) Whether a disclosure statement required under subsection (b) of this section contains adequate information is not governed by any otherwise applicable nonbankruptcy law, rule, or regulation, but an agency or official whose duty is to administer or enforce such a law, rule, or regulation may be heard on the issue of whether a disclosure statement contains adequate information. Such an agency or official may not appeal from, or otherwise seek review of, an order approving a disclosure statement.

(e) A person that solicits acceptance or rejection of a plan, in good faith and in compliance with the applicable provisions of this title, or that participates, in good faith and in compliance with the applicable provisions of this title, in the offer, issuance, sale, or purchase of a security, offered or sold under the plan, of the debtor, of an affiliate participating in a joint plan with the debtor, or of a newly organized successor to the debtor under the plan, is not liable, on account of such solicitation or participation, for violation of any applicable law, rule, or regulation governing solicitation of acceptance or rejection of a plan or the offer, issuance, sale, or purchase of securities.

(As amended Pub. L. 98-353, title III, § 509, July 10, 1984, 98 Stat. 385.)

AMENDMENTS

1984-Subsec. (a)(1). Pub. L. 98-353, § 509(a)(1), inserted", but adequate information need not include such information about any other possible or proposed plan".

Subsec. (a)(2)(B). Pub. L. 98–353, § 509(a)(2), inserted "the" after "with".

Subsec. (a)(2)(C). Pub. L. 98-353, § 509(a)(3), inserted "of" after "holders".

Subsec. (d). Pub. L. 98-353, § 509(b), inserted "required under subsection (b) of this section" and ", or otherwise seek review of,”.

Subsec. (e). Pub. L. 98-353, § 509(c), inserted "acceptance or rejection of a plan" after "solicits", and "solicitation of acceptance or rejection of a plan or" after "governing".

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 901, 1126, 1127, 1145 of this title; title 28 section 586.

§ 1126. Acceptance of plan

[See main edition for text of (a)]

(b) For the purposes of subsections (c) and (d) of this section, a holder of a claim or interest that has accepted or rejected the plan before the commencement of the case under this title is deemed to have accepted or rejected such plan, as the case may be, if—

[See main edition for text of (1)]

(2) if there is not any such law, rule, or regulation, such acceptance or rejection was solicited after disclosure to such holder of adequate information, as defined in section 1125(a) of this title.

[See main edition for text of (c)]

(d) A class of interests has accepted a plan if such plan has been accepted by holders of such interests, other than any entity designated under subsection (e) of this section, that hold at least two-thirds in amount of the allowed interests of such class held by holders of such interests, other than any entity designated under subsection (e) of this section, that have accepted or rejected such plan.

[See main edition for text of (e)]

(f) Notwithstanding any other provision of this section, a class that is not impaired under a plan, and each holder of a claim or interest of such class, are conclusively presumed to have accepted the plan, and solicitation of acceptances with respect to such class from the holders of claims or interests of such class is not required.

(g) Notwithstanding any other provision of this section, a class is deemed not to have accepted a plan if such plan provides that the claims or interests of such class do not entitle the holders of such claims or interests to receive or retain any property under the plan on account of such claims or interests.

(As amended Pub. L. 98-353, title III, § 510, July 10, 1984, 98 Stat. 386.)

AMENDMENTS

1984 Subsec. (b)(2). Pub. L. 98-353, § 510(a), substituted “1125(a)” for “1125(a)(1)”.

Subsec. (d). Pub. L. 98-353, § 510(b), inserted a comma after "such interests".

Subsec. (f). Pub. L. 98-353, § 510(c), substituted ", and each holder of a claim or interest of such class, are conclusively presumed" for "is deemed", "solicitation" for "solicititation", and "interests" for "interest".

Subsec. (g). Pub. L. 98-353, § 510(d), substituted “receive or retain any property" for "any payment or compensation".

EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

§ 1127. Modification of plan

(a) The proponent of a plan may modify such plan at any time before confirmation, but may not modify such plan so that such plan as modified fails to meet the requirements of sections 1122 and 1123 of this title. After the proponent of a plan files a modification of such plan with the court, the plan as modified becomes the plan.

(b) The proponent of a plan or the reorganized debtor may modify such plan at any time after confirmation of such plan and before substantial consummation of such plan, but may not modify such plan so that such plan as modified fails to meet the requirements of sections

1122 and 1123 of this title. Such plan as modified under this subsection becomes the plan only if circumstances warrant such modification and the court, after notice and a hearing, confirms such plan as modified, under section 1129 of this title.

[See main edition for text of (c) and (d)] (As amended Pub. L. 98-353, title III, § 511, July 10, 1984, 98 Stat. 386.)

AMENDMENTS

1984-Subsec. (a). Pub. L. 98-353, § 511(a), inserted "of a plan" after "After the proponent”, and “of such plan" after "modification".

Subsec. (b). Pub. L. 98-353, § 511(b), substituted "circumstances warrant such modification and the court, after notice and a hearing, confirms such plan as modified, under section 1129 of this title" for "the court, after notice and a hearing, confirms such plan, as modified, under section 1129 of this title, and circumstances warrant such modification".

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

§ 1128. Confirmation hearing

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 901 of this title; title 28 section 586.

§ 1129. Confirmation of plan

(a) The court shall confirm a plan only if all of the following requirements are met:

(1) The plan complies with the applicable provisions of this title.

(2) The proponent of the plan complies with the applicable provisions of this title.

(3) The plan has been proposed in good faith and not by any means forbidden by law.

(4) Any payment made or to be made by the proponent, by the debtor, or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, has been approved by, or is subject to the approval of, the court as reasonable; 1

(5)(A) [See main edition for text of (i)]

(ii) the appointment to, or continuance in, such office of such individual, is consistent with the interests of creditors and equity security holders and with public policy; and

(B) the proponent of the plan has disclosed the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for such insider.

(6) Any governmental regulatory commission with jurisdiction, after confirmation of the plan, over the rates of the debtor has approved any rate change provided for in the plan, or such rate change is expressly conditioned on such approval.

'So in original. The semicolon probably should be a period.

(7) With respect to each impaired class of claims or interests

[See main edition for text of (A)]

(B) if section 1111(b)(2) of this title applies to the claims of such class, each holder of a claim of such class will receive or retain under the plan on account of such claim property of a value, as of the effective date of the plan, that is not less than the value of such holder's interest in the estate's interest in the property that secures such claims.

(8) With respect to each class of claims or interests

[See main edition for text of (A) and (B)]

(9) Except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that

[See main edition for text of (A)]

(B) with respect to a class of claims of a kind specified in section 507(a)(3), 507(a)(4), 507(a)(5) or 507(a)(6) of this title, each holder of a claim of such class will receive[See main edition for text of (i) and (ii)]

(C) with respect to a claim of a kind specified in section 507(a)(7) of this title, the holder of such claim will receive on account of such claim deferred cash payments, over a period not exceeding six years after the date of assessment of such claim, of a value, as of the effective date of the plan, equal to the allowed amount of such claim.

(10) If a class of claims is impaired under the plan, at least one class of claims that is impaired under the plan has accepted the plan, determined without including any acceptance of the plan by any insider.

[See main edition for text of (11)]

(12) All fees payable under section 1930,2 as determined by the court at the hearing on confirmation of the plan, have been paid or the plan provides for the payment of all such fees on the effective date of the plan.

(b) [See main edition for text of (1)]

(2) For the purpose of this subsection, the condition that a plan be fair and equitable with respect to a class includes the following requirements:

(A) With respect to a class of secured claims, the plan provides

(i)(I) that the holders of such claims retain the liens securing such claims, whether the property subject to such liens is retained by the debtor or transferred to another entity, to the extent of the allowed amount of such claims; and

[See main edition for text of (ID))

(ii) for the sale, subject to section 363(k) of this title, of any property that is subject

'So in original. Probably should be section 1930 of title 28.

to the liens securing such claims, free and clear of such liens, with such liens to attach to the proceeds of such sale, and the treatment of such liens on proceeds under clause (i) or (iii) of this subparagraph; or

(iii) for the realization by such holders of the indubitable equivalent of such claims. (B) With respect to a class of unsecured claims

[See main edition for text of (i)]

(ii) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property.

(i) the plan provides that each holder of an interest of such class receive or retain on account of such interest property of a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; or

[See main edition for text of (ii); (c)]

(d) Notwithstanding any other provision of this section, on request of a party in interest that is a governmental unit, the court may not confirm a plan if the principal purpose of the plan is the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act of 1933 (15 U.S.C. 77e). In any hearing under this subsection, the governmental unit has the burden of proof on the issue of avoid

ance.

(As amended Pub. L. 98-353, title III, § 512, July 10, 1984, 98 Stat. 386; Pub. L. 99-554, title II, §§ 225, 283(v), Oct. 27, 1986, 100 Stat. 3102, 3118.)

AMENDMENTS

1986-Subsec. (a)(7). Pub. L. 99-554, § 283(v)(1), struck out "of" after "to".

Subsec. (a)(9)(B). Pub. L. 99-554, § 283(v)(2), inserted reference to section 507(a)(6).

Subsec. (a)(9)(C). Pub. L. 99-554, § 283(v)(3), substituted "507(a)(7)" for "507(a)(6)".

Subsec. (a)(12). Pub. L. 99-554, § 225, added par. (12). 1984-Subsec. (a)(1), (2). Pub. L. 98-353, § 512(a)(1), (2), substituted "title" for "chapter".

Subsec. (a)(4). Pub. L. 98-353, § 512(a)(3), amended par. (4) generally. Prior to amendment, par. (4) read as follows: "(A) Any payment made or promised by the proponent, by the debtor, or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in, or in connection with, the case, or in connection with the plan and incident to the case, has been disclosed to the court; and (B)(i) any such payment made before confirmation of the plan is reasonable; or (ii) if such payment is to be fixed after confirmation of the plan, such payment is subject to the approval of the court as reasonable." Subsec. (a)(5)(A)(ii). Pub. L. 98-353, § 512(a)(4), substituted"; and" for the period at the end.

Subsec. (a)(5)(B). Pub. L. 98-353, § 512(a)(5), substituted "the" for "The".

Subsec. (a)(6). Pub. L. 98-353, § 512(a)(6), inserted "governmental” after “Any”.

Subsec. (a)7). Pub. L. 98-353, § 512(a)(7)(A), substituted "of each impaired class of claims or interests" for "each class".

Subsec. (a)(7)(B). Pub. L. 98-353, § 512(a)(7)(B), substituted "holder's" for "creditor's".

Subsec. (a)8). Pub. L. 98-353, § 512(a)(8), inserted "of claims or interests" after "each class".

Subsec. (a)(10). Pub. L. 98-353, § 512(a)(9), substituted "If a class of claims is impaired under the plan, at least one class of claims that is impaired under the plan has accepted the plan, determined without including any acceptance of the plan by any insider" for "At least one class of claims has accepted the plan, determined without including any acceptance of the plan by any insider holding a claim of such class". Subsec. (b)(2)(A)(i)(I), (ii). Pub. L.

98-353, § 512(b)(1), substituted "liens” for “lien" wherever appearing.

Subsec. (b)(2)(B)(ii). Pub. L. 98-353, § 512(b)(2), inserted "under the plan" after "retain".

Subsec. (b)(2)(C)(i). Pub. L. 98-353, § 512(b)(3), substituted "interest" for "claim", and "or the value" for "and the value”.

Subsec. (d). Pub. L. 98-353, § 512(c), inserted "the application of" and provisions requiring that in any hearing under this subsection, the governmental unit has the burden of proof on the issue of avoidance.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by section 283 of Pub. L. 99-554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99-554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure.

Effective date and applicability of amendment by section 225 of Pub. L. 99-554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99-554.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

SUBCHAPTER III-POSTCONFIRMATION

MATTERS

§ 1141. Effect of confirmation

(a) Except as provided in subsections (d)(2) and (d)(3) of this section, the provisions of a confirmed plan bind the debtor, any entity issuing securities under the plan, any entity acquiring property under the plan, and any creditor, equity security holder, or general partner in the debtor, whether or not the claim or interest of such creditor, equity security holder, or general partner is impaired under the plan and whether or not such creditor, equity security holder, or general partner has accepted the plan.

[See main edition for text of (b)]

(c) Except as provided in subsections (d)(2) and (d)(3) of this section and except as otherwise provided in the plan or in the order confirming the plan, after confirmation of a plan, the property dealt with by the plan is free and clear of all claims and interests of creditors, equity security holders, and of general partners in the debtor.

[See main edition for text of (d)]

(As amended Pub. L. 98-353, title III, § 513, July 10, 1984, 98 Stat. 387.)

AMENDMENTS

1984-Subsec. (a). Pub. L. 98-353, § 513(a), substituted "any creditor, equity security holder, or general partner in" for "any creditor or equity security holder of, or general partner in,".

Subsec. (c). Pub. L. 98-353, § 513(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: "After confirmation of a plan, the property dealt with by the plan is free and clear of all claims and interests of creditors, of equity security holders, and of general partners in the debtor, except as otherwise provided in the plan or in the order confirming the plan."

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out as a note under section 101 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 348, 523, 524, 727, 1112 of this title; title 12 section 17152-1a. § 1142. Implementation of plan

(a) Notwithstanding any otherwise applicable nonbankruptcy law, rule, or regulation relating to financial condition, the debtor and any entity organized or to be organized for the purpose of carrying out the plan shall carry out the plan and shall comply with any orders of the court.

(b) The court may direct the debtor and any other necessary party to execute or deliver or to join in the execution or delivery of any instrument required to effect a transfer of property dealt with by a confirmed plan, and to perform any other act, including the satisfaction of any lien, that is necessary for the consummation of the plan.

(As amended Pub. L. 98-353, title III, § 514(a), (c), (d), July 10, 1984, 98 Stat. 387.)

AMENDMENTS

1984-Pub. L. 98-353, § 514(a), substituted "Implementation" for "Execution" in section catchline. Subsec. (a). Pub. L. 98-353, § 514(c), struck out the comma after "shall carry out the plan". Subsec. (b). Pub. L. 98-353, § 514(d), inserted "a" after "by".

§ 1144. Revocation of an order of confirmation

On request of a party in interest at any time before 180 days after the date of the entry of the order of confirmation, and after notice and a hearing, the court may revoke such order if and only if such order was procured by fraud. An order under this section revoking an order of confirmation shall

[See main edition for text of (1) and (2)] (As amended Pub. L. 98-353, title III, § 515, July 10, 1984, 98 Stat. 387.)

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United States Code, Volume 2