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Disclosure Statement

In connection with the solicitation of votes for a Plan of Reorganization, the debtor is required to prepare a prospectus-like document called a "disclosure statement," which is intended to contain all material information about the debtor, its business, and the proposed plan to allow creditors to make an informed decision when they vote on whether or not to accept the plan.

After the disclosure statement is filed, the court holds a hearing to determine whether the disclosure statement has "adequate information" to be approved. While the information required is governed by judicial discretion and the circumstances of the case, the plan must include a classification of claims and must specify how each class of claims will be treated under the plan.