11 U.S.C. § 1125 : US Code - Section 1125: Postpetition disclosure and solicitation

Search 11 U.S.C. § 1125 : US Code - Section 1125: Postpetition disclosure and solicitation

(a) In this section -
(1) "adequate information" means information of a kind, and in
sufficient detail, as far as is reasonably practicable in light
of the nature and history of the debtor and the condition of the
debtor's books and records, including a discussion of the
potential material Federal tax consequences of the plan to the
debtor, any successor to the debtor, and a hypothetical investor
typical of the holders of claims or interests in the case, that
would enable such a hypothetical investor of the relevant class
to make an informed judgment about the plan, but adequate
information need not include such information about any other
possible or proposed plan and in determining whether a disclosure
statement provides adequate information, the court shall consider
the complexity of the case, the benefit of additional information
to creditors and other parties in interest, and the cost of
providing additional information; and
(2) "investor typical of holders of claims or interests of the
relevant class" means investor having -
(A) a claim or interest of the relevant class;
(B) such a relationship with the debtor as the holders of
other claims or interests of such class generally have; and
(C) such ability to obtain such information from sources
other than the disclosure required by this section as holders
of claims or interests in such class generally have.
(b) An acceptance or rejection of a plan may not be solicited
after the commencement of the case under this title from a holder
of a claim or interest with respect to such claim or interest,
unless, at the time of or before such solicitation, there is
transmitted to such holder the plan or a summary of the plan, and a
written disclosure statement approved, after notice and a hearing,
by the court as containing adequate information. The court may
approve a disclosure statement without a valuation of the debtor or
an appraisal of the debtor's assets.
(c) The same disclosure statement shall be transmitted to each
holder of a claim or interest of a particular class, but there may
be transmitted different disclosure statements, differing in
amount, detail, or kind of information, as between classes.
(d) Whether a disclosure statement required under subsection (b)
of this section contains adequate information is not governed by
any otherwise applicable nonbankruptcy law, rule, or regulation,
but an agency or official whose duty is to administer or enforce
such a law, rule, or regulation may be heard on the issue of
whether a disclosure statement contains adequate information. Such
an agency or official may not appeal from, or otherwise seek review
of, an order approving a disclosure statement.
(e) A person that solicits acceptance or rejection of a plan, in
good faith and in compliance with the applicable provisions of this
title, or that participates, in good faith and in compliance with
the applicable provisions of this title, in the offer, issuance,
sale, or purchase of a security, offered or sold under the plan, of
the debtor, of an affiliate participating in a joint plan with the
debtor, or of a newly organized successor to the debtor under the
plan, is not liable, on account of such solicitation or
participation, for violation of any applicable law, rule, or
regulation governing solicitation of acceptance or rejection of a
plan or the offer, issuance, sale, or purchase of securities.
(f) Notwithstanding subsection (b), in a small business case -
(1) the court may determine that the plan itself provides
adequate information and that a separate disclosure statement is
not necessary;
(2) the court may approve a disclosure statement submitted on
standard forms approved by the court or adopted under section
2075 of title 28; and
(3)(A) the court may conditionally approve a disclosure
statement subject to final approval after notice and a hearing;
(B) acceptances and rejections of a plan may be solicited based
on a conditionally approved disclosure statement if the debtor
provides adequate information to each holder of a claim or
interest that is solicited, but a conditionally approved
disclosure statement shall be mailed not later than 25 days
before the date of the hearing on confirmation of the plan; and
(C) the hearing on the disclosure statement may be combined
with the hearing on confirmation of a plan.
(g) Notwithstanding subsection (b), an acceptance or rejection of
the plan may be solicited from a holder of a claim or interest if
such solicitation complies with applicable nonbankruptcy law and if
such holder was solicited before the commencement of the case in a
manner complying with applicable nonbankruptcy law.