Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

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 
    this title.

    (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 
title.
    (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

                         legislative statements

    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 
public company.
    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.


                               Amendments

    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 
``such interests''.
    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.


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