The post What is a disclosure statement? appeared first on Baltimore Bankruptcy Lawyer.
]]>The first step in the process is for the bankruptcy court to consider whether the disclosure statement contains adequate information to enable a typical creditor to decide whether to accept or reject the plan. If the bankruptcy court decides that there’s not sufficient information, the court may tell the debtor to go back and make another try at giving more information, or it may just say, “look, tweak what you’ve got, amend the disclosure statement and then we’ll allow you to disseminate the disclosure statement and the plan for balloting.”
The disclosure statement phase is a very important phase in reorganization case because typically, once a disclosure statement is approved, and it’s sent out for balloting, there’s always a very good chance that creditors are going to vote to accept the plan. And once the plan is accepted and confirmed by a court, it’s binding on all other creditors, whether they voted to accept the plan or whether they’ve even voted at all.
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