For those Salem clients that come to us here at The Law Office of Paul Petrillo for assistance in filing for a Chapter 11 bankruptcy, one of the components of their proceedings that generates the most questions is the disclosure statement. If you are preparing for such a case yourself to reorganize your small business, it may be important for you to review exactly what a disclosure statement is as well as the requirements regarding its filing and approval.
Your disclosure statement offers creditors more in-depth details of both yours and your company’s current financial standing than those given in your reorganization plan. Included among the required elements of a disclosure statement are:
- An inventory of your business assets.
- A detailed accounting of all of your outstanding debts.
- Any current deals or other business affairs your company is currently engaged in.
When explaining your debts, you are required to classify them according to how you propose to treat them as part of your reorganization plan. This includes stipulating which you may be able pay in full, and which you are seeking to modify. The purpose of all of this information is to allow the court and your creditors to determine the validity of your plan.
According to the Local Bankruptcy Rules for the U.S. Bankruptcy Court’s New Hampshire District, a copy of your reorganization plan must be submitted with your disclosure statement, along with the dates of your confirmation hearing and the deadline to submit objections to the disclosure statement. Once the statement is approved, you then have seven days to submit a proposed order which includes, among other things, a deadline for creditors to object to their claims being discharged through your bankruptcy.
More information on preparing for your Chapter 11 bankruptcy can be found on our site.