Disclosure Statement

By Eyal Hazan
/
June 6, 2022

If you file for Chapter 11 bankruptcy, it is likely you will be required to submit a document called a disclosure statement. In this article, we define disclosure statements and explain the role they play in Chapter 11 bankruptcy proceedings. 

Key Takeaways

  • A disclosure statement is a legal or financial document explaining important information
  • Disclosure statements are used in many contexts including retirement accounts, loans, and bankruptcy proceedings
  • Debtors filing for Chapter 11 bankruptcy must usually fill out disclosure statements providing enough information about their financial affairs and reorganization plan to help creditors make an informed decision about whether or not to accept it
  • The exact information written in a disclosure statement varies, but it can include things like a summary of the reorganization plan and a description of why the debtor went into bankruptcy 

What Is a Disclosure Statement?

A disclosure statement is a financial or legal document given to a member of a transaction or legal proceeding explaining important information in plain language. Disclosure statements are used for a number of purposes including retirement accounts, loans, and bankruptcy. 

Disclosure Statements in Bankruptcy

For debtors filing for Chapter 11 bankruptcy, it is usually mandatory to fill out a disclosure statement providing adequate information about your financial affairs so that creditors can make an informed decision about whether to accept or reject their reorganization plan. 

After the disclosure statement is approved by the court, the court will conduct a confirmation hearing to determine whether or not to confirm the plan. 

What Information Should be Included in a Disclosure Statement?

The exact information you include in your Chapter 11 bankruptcy disclosure statement will depend on the nature of the bankruptcy, your credit history, and the size of your business. If your business is small enough, the bankruptcy court may not even require a separate disclosure statement if the reorganization plan is found to be sufficient in and of itself. In general, bankruptcy courts have broad discretion in determining the approval of a disclosure statement.

Types of information often included in disclosure statements include:

  • A summary of the reorganization plan
  • The tax consequences of the reorganization plan
  • A description of claims and liabilities and how they are treated in the plan
  • Procedures and requirements of plan confirmation
  • A description of the debtor's assets and their value
  • The debtor’s history
  • The feasibility of the plan
  • The circumstances that caused the bankruptcy filing

Featured Bankruptcy Lawyers

Rasor Law Firm

Google rating
4.4
32 years in practice
Bankruptcy, Criminal Defense, Divorce & Family Law, Employment Law, Personal Injury
View Profile

The Meister & McCracken Law Firm

Google rating
4.4
14 years in practice
Bankruptcy, Criminal Defense, Social Security Disability
View Profile

Timothy Denison, Esq.

Google rating
4.8
31 years in practice
Bankruptcy, Criminal Defense, Divorce & Family Law, DUI Law, Traffic Ticket
View Profile

George Law

Google rating
4.9
16 years in practice
Business Law, Criminal Defense, DUI Law, Sexual Assault
View Profile

The Law Offices Of Barton Morris

Google rating
4.6
24 years in practice
Criminal Defense, DUI Law
View Profile

The Law Offices of Marc E. Hart

Google rating
5
38 years in practice
Criminal Defense, DUI Law, Sexual Assault
View Profile

Related Posts

No-Asset Case
Daisy RogozinskyJune 13, 2022
Priority Claim
Daisy RogozinskyJune 20, 2022
Reaffirmation Agreement
Daisy RogozinskyJune 20, 2022
Property of the Estate
Daisy RogozinskyJune 20, 2022
Attorney At Law is changing how clients connect with lawyers. By providing an innovative platform to lawyers who want to expand their practice’s reach, AAL is bringing law practices into the future.
6142 Innovation Way
Carlsbad, California 92009
© 2022 Attorney at Law | All rights reserved
Some of the content of this website may be considered attorney advertising under the rules of certain jurisdictions. The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
crossmenuchevron-upchevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram