Bankruptcy Plan Confirmation: Plan Approval, Creditor Voting

This guide provides a comprehensive overview of the Chapter 11 bankruptcy plan confirmation process, including plan approval, creditor voting, and the requirements for successful plan confirmation.


Bankruptcy is a legal process that allows individuals or entities to reorganize or eliminate their debts under the protection of the federal bankruptcy court. One of the critical stages in a bankruptcy proceeding, particularly under Chapter 11, is the confirmation of a bankruptcy plan. This process involves the approval of the plan by the court and the voting of creditors. This guide will provide a comprehensive overview of the bankruptcy plan confirmation process, including plan approval and creditor voting.

Chapter 11 Bankruptcy Overview

What is Chapter 11 Bankruptcy?

Chapter 11 bankruptcy, often referred to as "reorganization" bankruptcy, allows businesses and individuals with substantial debt to restructure their financial obligations while continuing to operate. The goal is to create a plan that maximizes the return to creditors while allowing the debtor to remain in business.

Key Features of Chapter 11 Bankruptcy

  • Debtor in Possession (DIP): The debtor typically remains in control of their assets and business operations during the bankruptcy process.
  • Automatic Stay: An automatic stay halts most collection actions against the debtor, providing temporary relief from creditors.
  • Plan of Reorganization: The debtor proposes a plan to restructure its debts, which must be approved by the court and accepted by creditors.

For more information, visit the United States Courts' Chapter 11 Bankruptcy Basics.

The Bankruptcy Plan

What is a Bankruptcy Plan?

A bankruptcy plan is a detailed proposal that outlines how the debtor intends to repay creditors over time. The plan must comply with the requirements of the Bankruptcy Code and is subject to approval by the bankruptcy court.

Components of a Bankruptcy Plan

  • Classification of Claims: The plan must classify claims into different categories, such as secured claims, unsecured claims, and priority claims.
  • Treatment of Claims: The plan must specify how each class of claims will be treated, including the amount to be paid and the timeline for payments.
  • Means of Implementation: The plan must describe how the debtor will generate the funds needed to make the payments, such as through continued business operations or asset sales.

Filing the Plan

The debtor must file the proposed plan with the bankruptcy court. The plan must be accompanied by a disclosure statement that provides sufficient information for creditors to make an informed decision about the plan.

For more details, refer to the Official Form 14 - U.S. Courts.

Plan Approval Process

Disclosure Statement Approval

Before creditors can vote on the plan, the court must approve the disclosure statement. The disclosure statement must provide "adequate information" about the plan, including the debtor's financial condition, the proposed treatment of claims, and the feasibility of the plan.

Confirmation Hearing

Once the disclosure statement is approved, the court will schedule a confirmation hearing. During the hearing, the court will consider whether the plan meets the requirements of the Bankruptcy Code and whether it should be confirmed.

Requirements for Plan Confirmation

Under 11 U.S.C. § 1129, the court must find that the plan meets several requirements, including:

  • Best Interests of Creditors: The plan must provide that each creditor will receive at least as much as they would in a Chapter 7 liquidation.
  • Feasibility: The plan must be feasible, meaning that it is likely to succeed and that the debtor will be able to make the proposed payments.
  • Good Faith: The plan must be proposed in good faith and not by any means forbidden by law.
  • Acceptance by Creditors: The plan must be accepted by at least one impaired class of creditors, unless the plan is "crammed down" under the provisions of the Bankruptcy Code.

For the full text of 11 U.S.C. § 1129, visit the U.S. Code.

Creditor Voting

Who Can Vote?

Creditors whose claims are "impaired" by the plan are entitled to vote on the plan. A claim is considered impaired if the plan alters the creditor's legal, equitable, or contractual rights.

Voting Process

  • Ballots: Creditors receive ballots along with the disclosure statement and plan. The ballots allow creditors to vote to accept or reject the plan.
  • Voting Deadline: Creditors must submit their ballots by a specified deadline, which is typically set by the court.
  • Tabulation of Votes: The votes are tabulated to determine whether the plan has been accepted by the required number of creditors.

Acceptance Requirements

For a plan to be accepted by a class of creditors, it must receive:

  • Two-Thirds in Amount: At least two-thirds of the total amount of claims in the class must vote to accept the plan.
  • More Than One-Half in Number: More than one-half of the total number of creditors in the class must vote to accept the plan.


If the plan is not accepted by all impaired classes, the debtor may seek confirmation through a process known as "cramdown." Under cramdown, the court can confirm the plan over the objections of dissenting creditors if the plan meets certain requirements, including that it is fair and equitable.

For more information on creditor voting and plan confirmation, refer to the Department of Justice's Outline on Bankruptcy Players.


The confirmation of a bankruptcy plan is a critical step in the Chapter 11 bankruptcy process. It involves the approval of the plan by the court and the voting of creditors. The plan must meet several requirements under the Bankruptcy Code, and creditors whose claims are impaired by the plan have the right to vote on it. Understanding the plan confirmation process is essential for both debtors and creditors involved in a Chapter 11 bankruptcy.

For additional resources and information, visit the following official links:

By understanding the intricacies of plan approval and creditor voting, stakeholders can navigate the bankruptcy process more effectively and work towards a successful reorganization.

About the author
Von Wooding

Von Wooding

Helpful legal information and resources

Counsel Stack Learn

Free and helpful legal information

Counsel Stack Learn

Great! You’ve successfully signed up.

Welcome back! You've successfully signed in.

You've successfully subscribed to Counsel Stack Learn.

Success! Check your email for magic link to sign-in.

Success! Your billing info has been updated.

Your billing was not updated.