A Chapter 11 plan is often described as the heart of a bankruptcy case. A confirmed plan determines who gets paid, how much they get, when they get it, and what the business looks like when the case is over.As Harold Israel of Levenfeld Pearlstein, LLC, explains, “A Chapter 11 plan of reorganization or liquidation is a binding contract between the debtor and its creditors that sets forth how claims and interests will be treated and how the debtor will operate or wind down after confirmation.”Once confirmed, a Chapter 11 plan operates like a court order and a contract rolled into one, resolving disputes that arose before confirmation and setting the rules going forward.The plan addresses far more than just payments. It can change corporate governance, impose releases and injunctions, restructure secured debt, and determine how litigation claims are handled. Once confirmed, the plan binds all parties, even those who voted against it.The Key Players and Their IncentivesEvery Chapter... Read the complete article here...© Copyright 2026 Financial Poise
Understanding the Chapter 11 Plan
