CHAPTER 11 REORGANIZATION
Sub Chapter II The Plan
Sec. 1126. Acceptance of plan
(a) The holder of a claim or interest allowed under section 502 of
this title may accept or reject a plan. If the United States is a
creditor or equity security holder, the Secretary of the Treasury may
accept or reject the plan on behalf of the United States.
(b) For the purposes of subsections (c) and (d) of this section, a
holder of a claim or interest that has accepted or rejected the plan
before the commencement of the case under this title is deemed to have
accepted or rejected such plan, as the case may be, if--
(1) the solicitation of such acceptance or rejection was in
compliance with any applicable nonbankruptcy law, rule, or
regulation governing the adequacy of disclosure in connection with
such solicitation; or
(2) if there is not any such law, rule, or regulation, such
acceptance or rejection was solicited after disclosure to such
holder of adequate information, as defined in section 1125(a) of
(c) A class of claims has accepted a plan if such plan has been
accepted by creditors, other than any entity designated under subsection
(e) of this section, that hold at least two-thirds in amount and more
than one-half in number of the allowed claims of such class held by
creditors, other than any entity designated under subsection (e) of this
section, that have accepted or rejected such plan.
(d) A class of interests has accepted a plan if such plan has been
accepted by holders of such interests, other than any entity designated
under subsection (e) of this section, that hold at least two-thirds in
amount of the allowed interests of such class held by holders of such
interests, other than any entity designated under subsection (e) of this
section, that have accepted or rejected such plan.
(e) On request of a party in interest, and after notice and a
hearing, the court may designate any entity whose acceptance or
rejection of such plan was not in good faith, or was not solicited or
procured in good faith or in accordance with the provisions of this
(f) Notwithstanding any other provision of this section, a class
that is not impaired under a plan, and each holder of a claim or
interest of such class, are conclusively presumed to have accepted the
plan, and solicitation of acceptances with respect to such class from
the holders of claims or interests of such class is not required.
(g) Notwithstanding any other provision of this section, a class is
deemed not to have accepted a plan if such plan provides that the claims
or interests of such class do not entitle the holders of such claims or
interests to receive or retain any property under the plan on account of
such claims or interests.
(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2634; Pub. L. 98-353, title III,
Sec. 510, July 10, 1984, 98 Stat. 386.)
Historical and Revision Notes
Section 1126 of the House amendment deletes section 1126(e) as
contained in the House bill. Section 105 of the bill constitutes
sufficient power in the court to designate exclusion of a creditor's
claim on the basis of a conflict of interest. Section 1126(f) of the
House amendment adopts a provision contained in section 1127(f) of the
Senate bill indicating that a class that is not impaired under a plan is
deemed to have accepted a plan and solicitation of acceptances from such
class is not required.
senate report no. 95-989
Subsection (a) of this section permits the holder of a claim or
interest allowed under section 502 to accept or reject a proposed plan
of reorganization. The subsection also incorporates a provision now
found in section 199 of chapter X [section 599 of former title 11] that
authorizes the Secretary of the Treasury to accept or reject a plan on
behalf of the United States when the United States is a creditor or
equity security holder.
Subsection (b) governs acceptances and rejections of plans obtained
before commencement of a reorganization for a nonpublic company.
Paragraph (3) expressly states that subsection (b) does not apply to a
Prepetition solicitation is a common practice under chapter XI
[chapter 11 of former title 11] today, and chapter IX [chapter 9 of
former title 11] current makes explicit provision for it. Section
1126(b) counts a prepetition acceptance or rejection toward the required
amounts and number of acceptances only if the solicitation of the
acceptance or rejection was in compliance with any applicable
nonbankruptcy law, rule, or regulation governing the adequacy of
disclosure in connection with such solicitation. If there is not any
such applicable law, rule, or regulation, then the acceptance or
rejection is counted only if it was solicited after disclosure of
adequate information, to the holder, as defined in section 1125(a)(1).
This permits the court to ensure that the requirements of section 1125
are not avoided by prepetition solicitation.
Subsection (c) specifies the required amount and number of
acceptances for a class of creditors. A class of creditors has accepted
a plan if at least two-thirds in amount and more than one-half in number
of the allowed claims of the class that are voted are cast in favor of
the plan. The amount and number are computed on the basis of claims
actually voted for or against the plan, not as under chapter X [chapter
10 of former title 11] on the basis of the allowed claims in the class.
Subsection (f) excludes from all these calculations claims not voted in
good faith, and claims procured or solicited not in good faith or not in
accordance with the provisions of this title.
Subsection (c) requires that the same disclosure statement be
transmitted to each member of a class. It recognizes that the
information needed for an informed judgment about the plan may differ
among classes. A class whose rights under the plan center on a
particular fund or asset would have no use for an extensive description
of other matters that could not affect them.
Subsection (d) relieves the court of the need to follow any
otherwise applicable Federal or state law in determining the adequacy of
the information contained in the disclosure statement submitted for its
approval. It authorizes an agency or official, Federal or state, charged
with administering cognate laws so pre-empted to advise the court on the
adequacy of proposed disclosure statement. But they are not authorized
to appeal the court's decision.
Solicitations with respect to a plan do not involve just mere
requests for opinions. Acceptance of the plan vitally affects creditors
and shareholders, and most frequently the solicitation involves an
offering of securities in exchange for claims or interests. The present
Bankruptcy Act [former title 11] has exempted such offerings under each
of its chapters from the registration and disclosure requirements of the
Securities Act of 1933 [15 U.S.C. 77a et seq.], an exemption also
continued by section 1145 of this title. The extension of the disclosure
requirements to all chapter 11 cases is justified by the integration of
the separate chapters into the single chapter 11. By the same token, no
valid purpose is served by failing to provide exemption from the
requirements of similar state laws in a matter under the exclusive
jurisdiction of the Federal bankruptcy laws.
Under subsection (d), with respect to a class of equity securities,
it is sufficient for acceptance of the plan if the amount of securities
voting for the plan is at least two-thirds of the total actually voted.
Subsection (e) provides that no acceptances are required from any
class whose claims or interests are unimpaired under the plan or in the
order confirming the plan.
Subsection (g) provides that any class denied participation under
the plan is conclusively deemed to have rejected the plan. There is
obviously no need to submit a plan for a vote by a class that is to
receive nothing. But under subsection (g) the excluded class is like a
class that has not accepted, and is a dissenting class for purposes of
confirmation under section 1130.
1984--Subsec. (b)(2). Pub. L. 98-353, Sec. 510(a), substituted
``1125(a)'' for ``1125(a)(1)''.
Subsec. (d). Pub. L. 98-353, Sec. 510(b), inserted a comma after
Subsec. (f). Pub. L. 98-353, Sec. 510(c), substituted ``, and each
holder of a claim or interest of such class, are conclusively presumed''
for ``is deemed'', ``solicitation'' for ``solicititation'', and
``interests'' for ``interest''.
Subsec. (g). Pub. L. 98-353, Sec. 510(d), substituted ``receive or
retain any property'' for ``any payment or compensation''.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98-353 effective with respect to cases filed 90
days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out
as a note under section 101 of this title.
Section Referred to in Other Sections
This section is referred to in sections 901, 946 of this title.