Section 1129 (7) Of The Bankruptcy Code
Section 1129(a)(7) of the Bankruptcy Code requires that each holder of an impaired allowed claim or interest either (1) accept the plan of reorganization or (2) receive or retain under the plan property of a value, as of the effective date, that is not less than the value such holder would receive or retain under the plan or reorganization if the applicable debtor were liquidated under Chapter 7 of the Bankruptcy Code on the effective date. This is referred to as the “best interests” test. To make these findings, a bankruptcy court must (1) estimate the cash liquidation proceeds that a Chapter 7 trustee would generate if each of the debtor’s Chapter 11 cases were converted to a Chapter 7 case and the assets of such debtor’s estate were liquidated; (2) determine the liquidation distribution that each non-accepting holder of a claim
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Eventually, the debtor will apply to the court for a final decree closing the case.
Adversary proceedings. Adversary proceedings, otherwise known as lawsuits in the bankruptcy case, may take many forms, including complaints seeking to avoid liens, actions to avoid preferential transfers, actions to avoid fraudulent transfers, or actions to avoid post-petition transfers. These proceedings are governed by the Rules of Bankruptcy Procedure. Many of the bankruptcy rules mirror the language of the Federal Civil Rules of Procedure.
There are limitations set forth under the Bankruptcy Code for filing such actions. For example, the code sets a 60-day deadline from the date of the initial meeting of creditors (the “341 meeting”) to file complaints objecting to the debtor’s discharge. Bankruptcy Rule 4007. The business debtor entity cannot receive a discharge, so this limitation does not apply. But the limitation does apply to an individual
Eventually, the debtor will apply to the court for a final decree closing the case.
Adversary proceedings. Adversary proceedings, otherwise known as lawsuits in the bankruptcy case, may take many forms, including complaints seeking to avoid liens, actions to avoid preferential transfers, actions to avoid fraudulent transfers, or actions to avoid post-petition transfers. These proceedings are governed by the Rules of Bankruptcy Procedure. Many of the bankruptcy rules mirror the language of the Federal Civil Rules of Procedure.
There are limitations set forth under the Bankruptcy Code for filing such actions. For example, the code sets a 60-day deadline from the date of the initial meeting of creditors (the “341 meeting”) to file complaints objecting to the debtor’s discharge. Bankruptcy Rule 4007. The business debtor entity cannot receive a discharge, so this limitation does not apply. But the limitation does apply to an individual