The Chapter 11 plan must comply with all the provisions of bankruptcy code
The Chapter 11 plan was filed in good faith and all relevant information has been fully disclosed
Payments to made unsecured creditors after confirmation will equal or exceed the amount such creditors would receive in a hypothetical Chapter 7 liquidation (a best interest test).
All payments to US Trustee have been paid
In small business cases the court will confirm the plan within 45 days of filing of the plan unless the court extends the period.
The effects of confirmation:
If the Debtor is an individual Debtor he/she/they will be discharged of debts upon completion of the plan.
For all other Chapter 11 Debtors it shall be discharged upon confirmation of all debts other than the debts to be paid in the confirmed Chapter 11 plan.
ONE ADDITIONAL NOTE:
In this chapter where I have listed time limits with the notations that such can be extended. However, the US Trustee and the courts themselves regard Small Business Chapter 11s as being on a fast track. The US Trustee and the courts want Small Business Chapter 11 cases to be completed within 6 months to 8 months. The courts place greater burdens on Small Business Chapter 11 cases when extending the various time limits. The time in a Chapter 11 can certainly be longer than a few months but good cause has to be shown.
That said it shows why pre filing preparation is certainly in the best interest of clients.
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