Filed: Oct. 27, 2016
Latest Update: Oct. 27, 2016
Summary: ORDER REQUIRING DEBTORS TO AMEND DISCLOSURE STATEMENT THOMAS J. TUCKER , Bankruptcy Judge . On October 24, 2016, the Debtors filed a plan and disclosure statement, in a document entitled "Combined Plan of Reorganization and Disclosure Statement of Craig and Brenda Miller" (Docket # 94, the "Plan"). The Court cannot yet grant preliminary approval of the disclosure statement contained within this document ("Disclosure Statement"). The Court notes the following problems, which Debtors must cor
Summary: ORDER REQUIRING DEBTORS TO AMEND DISCLOSURE STATEMENT THOMAS J. TUCKER , Bankruptcy Judge . On October 24, 2016, the Debtors filed a plan and disclosure statement, in a document entitled "Combined Plan of Reorganization and Disclosure Statement of Craig and Brenda Miller" (Docket # 94, the "Plan"). The Court cannot yet grant preliminary approval of the disclosure statement contained within this document ("Disclosure Statement"). The Court notes the following problems, which Debtors must corr..
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ORDER REQUIRING DEBTORS TO AMEND DISCLOSURE STATEMENT
THOMAS J. TUCKER, Bankruptcy Judge.
On October 24, 2016, the Debtors filed a plan and disclosure statement, in a document entitled "Combined Plan of Reorganization and Disclosure Statement of Craig and Brenda Miller" (Docket # 94, the "Plan"). The Court cannot yet grant preliminary approval of the disclosure statement contained within this document ("Disclosure Statement"). The Court notes the following problems, which Debtors must correct.
First, because "Effective Date" is a defined term under Paragraph I.2.U of the Plan on page 6, it must be capitalized in every instance where it is used in the Plan (e.g., in describing when payments will begin for Classes IV, V, VI, and VIII on pages 14-16 of the Plan).
Second, Debtors must change the first sentence in the description of the treatment of Class VIII, on pages 15-16 of the Plan, by deleting the following stricken language:
The claimants of Class VIII shall consist of the claims of the non-priority unsecured Creditors. including the unsecured portion of all secured creditors as well as those Creditors, if any, whose claims arise from the rejection of executory contracts.
The reason for this change is that according to the Plan, there are no secured creditors whose claims are being treated, in part, as unsecured claims, and there are no creditors with executory contracts being rejected.
Third, Debtors must delete Class IX of the Plan on page 17.
Fourth, Debtors must delete the second sentence of text in Article IV of the Plan on page 17, because the first sentence says that there are no executory contracts or unexpired leases as of the petition date. Given this, there can be no "other" executory contracts or unexpired leases that can be assumed or rejected under 11 U.S.C. § 365.
Fifth, in the first sentence of the last paragraph on page 18 of the Plan, Debtors must delete the phrase "their shareholders, or their management."
Sixth, Debtors must modify Paragraph VI.E.2 on page 45 of the Disclosure Statement, so that it states, in its entirety:
2. Except as provided in the plan and in 11 U.S.C. §1141(d):
(a) In the case of an individual or husband and wife, as in this case:
1. Claims will be discharged, except as provided in 11 U.S.C. §§ 523(a) and 1141(d). Unless the Court orders otherwise, the discharge will be entered only after completion of plan payments as provided in § 1141(d)(5)(a). It is the usual practice of the Court to close Chapter 11 cases after confirmation, then the individual debtor files a motion to reopen the case for entry of discharge upon completion of plan payments.
2. Creditors will be prohibited from asserting their claims except as to those debts, which are not discharged or dischargeable under 11 U.S.C. §§ 523 and 1141(d).
Accordingly,
IT IS ORDERED that no later than November 1, 2016, Debtors must file an amended combined plan and disclosure statement that is consistent with this Order.
IT IS FURTHER ORDERED that no later than November 1, 2016, Debtors also must file a redlined version of the amended combined plan and disclosure statement, showing the changes Debtors have made to the "Combined Plan of Reorganization and Disclosure Statement of Craig and Brenda Miller" filed October 24, 2016.
