Phases of the Case
Chapter 11 Case Phases Overview
There are three distinct phases to every bankruptcy case regardless of whether a traditional, liquidating traditional, prearranged or prepackaged chapter 11:
- Pre-petition or before bankruptcy/bankruptcy case preparation
- Post petition or during bankruptcy/bankruptcy case execution
- Post confirmation or after bankruptcy/bankruptcy estate closure
Pre-petition and post petition relate to the petition date or the date on which the company filed for chapter 11 bankruptcy. The last refers to the confirmation or court order approving the plan of reorganization or the legal document, which provides for creditor settlements.
The petition date is an important marker of time because it distinguishes how a debt should be classified in a plan of reorganization and in turn, how it should be paid.
With pre-petition debts, the payment cannot occur until after a plan of reorganization has been accepted by a majority of creditors, approved by the federal bankruptcy court and all creditor claims within a particular class have been settled.
With post petition debts, the payment would occur post petition to maintain good standing creditor relationships. If a post petition payment is not made, it could become an administrative claim that would be paid in kind with the pre-petition debts upon settlement of a class of creditors post confirmation.
In each of the phases of the case different restructuring activities take place with the ultimate goal of settling all debts of the bankruptcy estate and closing of the case. The following lists some of the restructuring actions which take place during each phase of the case.
Chapter 11 Case: Pre-petition Phase
During the "pre-petition" or "bankruptcy case preparation" phase, attorneys, advisors and Phase Eleven are preparing factual diligence and legal information for use in pleadings which initiate the bankruptcy case and are served or "sent" to creditors. The signed court orders which result from these pleadings allow a company to take certain actions under chapter 11 protection.
Depending on the type of case (traditional, liquidating traditional, prearranged or prepackaged), the pre-petition phase may require more up front effort for case professionals and company officials related to plan of reorganization preparation and solicitation.
Communication about content, constructs, purposes, timing of documents and events are an important aspect to comprehensive chapter 11 pleadings and the success of a court filing.
Phase Eleven's case preparation team will assist professionals with information assembly, communication and preparation of first day pleadings utilizing methodologies developed at two of the countries premier law firm bankruptcy practices.
As part of solid case preparation, our team will organize and record pleading diligence in the Relational Restructuring Database for reference and recycling in all future communications, compliance materials and filed court pleadings.
Chapter 11 Case: Post Petition Phase
The post petition or "bankruptcy case" phase begins once voluntary petitions and first day pleadings have been filed in federal bankruptcy court.
During the course of post petition phase, case professionals will focus their efforts on restructuring of business operations, bankruptcy code and chapter 11 case compliance, creditor responses, schedules and statements, claims, solicitation (if not a prepackaged case) and plan confirmation for the ultimate purpose of confirming a plan of reorganization and exiting bankruptcy.
Phase Eleven's case management team will provide administrative support to case professionals for all post petition aspects of the chapter 11 case.
Phase Eleven's case management teams, utilizing their advanced Microsoft SQL Server enabled database, will organize and record all post petition case information for reference and re-use in all future communications, compliance materials and filed court pleadings.
Phase Eleven offers administrative support for the following list of post petition services:
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Chapter 11 Case: Post Confirmation Phase
The plan of reorganization, voted on during the post petition solicitation phase of the chapter 11 case, must be approved by a federal bankruptcy judge in order for the companies to exit bankruptcy protection and function as a going concern.
The confirmation hearing which results in the signature of an order confirming the plan of reorganization will establish the next phase of the case: the post confirmation phase. The confirmation order approves the companies plan of reorganization which establishes, among other things:
- Effective date and related compliance issues
- Estate trust administrator
- Plan class treatments for disbursement
During the post confirmation phase of the case, the estate trust administrator and the creditors committee will take certain actions in the bankruptcy court to object to claims, recover funds and unwind the remaining assets of the estate. One of the established goals of the post confirmation phase is to maximize remaining recovery to estate creditors through a combination of business operations, case administration, claims objection, disbursement and estate litigation.
Phase Eleven will provide solid administrative support to all parties to the post confirmation estate for an expeditious and efficient conclusion of the case.
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