Changes to Confirmed Toggle Chapter 11 Plan Required No Additional Disclosure and Voting Where Creditors' Rights Not Materially and Adversely Affected

Summary

This article discusses a recent decision on whether the debtors' post-confirmation toggle to an alternative transaction required additional disclosure and resolicitation to creditors. Even after a bankruptcy court has confirmed a Chapter 11 plan, changed circumstances prior to the plan's implementation and substantial consummation might make alterations to the plan necessary. If a proposed change is significant enough, it may be deemed a plan modification, in which case the Bankruptcy Code may require that stakeholders be provided with additional disclosure regarding the alteration and an opportunity to vote on the plan as modified.