Business reorganization plan
In fact, nearly half launch some kind of reorganization during their first two years on the job. Even that brisk pace seems to be accelerating, ly announcing organizational spike in ambitious plans to reorganize doubtless reflects the economic cycle. Changing an organization’s structure can seem like an effective way of shaking up the entire operation and thereby unlocking better corporate reorganizations are risky investments of time, energy and resources, and many do little to improve the business. A recent bain & company study of 57 major reorganizations found that fewer than one third produced any meaningful improvement in performance. The reorganizations that work best don’t just reshuffle the boxes and lines on an org chart. A new org chart can’t make much difference unless it somehow leads to better, faster decisions and fact, redesigning the org chart is almost always counterproductive if leaders fail to think through what the critical decisions are for the business, who should be responsible for them, and how the new structure will help people make and execute them better. Product development slowed, and costs e that approach with ford’s recent reorganization under alan mulally. They divested non-core brands such as aston martin, jaguar, land rover and volvo, reduced the number of production platforms, began consolidating both suppliers and dealers and so the way they decided to reorganize the company, moving from a structure based on regional business units to a global matrix of functions and geographies. Reorganization” is one of those business subjects that usually evokes a cynical response and can fill pages of dilbert cartoons. An example would be a new market, product, or service and your current structure just wasn’t designed to support your new business these are all good reasons, it’s important to consider reorganizing as just one possible alternative. These are usually the individuals who have enough confidence in their position with the new company to put their self-interests process of organizational changewhile there's no perfect science to how reorganization unfolds, here are some pointers:1. You simply select the best one and come up with an action plan to mitigate the risks. Test the final design with time testing the design by discussing how various business processes would work within the new ’t expect people to understand it or buy into it right away – chances are, you didn’t at first (see “the marathon effect”). Ways to ignite employee to write real performance expectations that make a for persuading your boss to support your to main r 11 - bankruptcy chapter of the bankruptcy code generally provides for reorganization, usually involving a corporation or partnership.
Business restructuring plan
A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. Case filed under chapter 11 of the united states bankruptcy code is frequently referred to as a "reorganization" individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. If a debt management plan is developed during required credit counseling, it must be filed with the court. Such debtors must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Voluntary petition will include standard information concerning the debtor's name(s), social security number or tax identification number, residence, location of principal assets (if a business), the debtor's plan or intention to file a plan, and a request for relief under the appropriate chapter of the bankruptcy code. The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee. A debtor will remain a debtor in possession until the debtor's plan of reorganization is confirmed, the debtor's case is dismissed or converted to chapter 7, or a chapter 11 trustee is appointed. Generally, the debtor, as "debtor in possession," operates the business and performs many of the functions that a trustee performs in cases under other chapters. A written disclosure statement and a plan of reorganization must be filed with the court. The disclosure statement is a document that must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a creditor to make an informed judgment about the debtor's plan of reorganization. In a "small business case" (discussed below) the debtor may not need to file a separate disclosure statement if the court determines that adequate information is contained in the plan. The contents of the plan must include a classification of claims and must specify how each class of claims will be treated under the plan. Those whose contractual rights are to be modified or who will be paid less than the full value of their claims under the plan, vote on the plan by ballot. After the disclosure statement is approved by the court and the ballots are collected and tallied, the court will conduct a confirmation hearing to determine whether to confirm the plan.
For example, property of the estate for an individual debtor includes the debtor's earnings and property acquired by the debtor after filing until the case is closed, dismissed or converted; funding of the plan may be from the debtor's future earnings; and the plan cannot be confirmed over a creditor's objection without committing all of the debtor's disposable income over five years unless the plan pays the claim in full, with interest, over a shorter period of time. Chapter 11 debtor in r 11 is typically used to reorganize a business, which may be a corporation, sole proprietorship, or partnership. Accordingly, a bankruptcy case involving a sole proprietorship includes both the business and personal assets of the owners-debtors. Trustee is responsible for monitoring the compliance of the debtor in possession with the reporting ad reorganizations have specific requirements under subsection iv of chapter 11, which will not be addressed here. Trustee is responsible for monitoring the debtor in possession's operation of the business and the submission of operating reports and fees. Trustee monitors applications for compensation and reimbursement by professionals, plans and disclosure statements filed with the court, and creditors' committees. Among other things, the committee: consults with the debtor in possession on administration of the case; investigates the debtor's conduct and operation of the business; and participates in formulating a plan. A creditors' committee can be an important safeguard to the proper management of the business by the debtor in small business case and the small business some smaller cases the u. The bankruptcy code addresses this issue by treating a "small business case" somewhat differently than a regular bankruptcy case. Determination of whether a debtor is a "small business debtor" requires application of a two-part test. First, the debtor must be engaged in commercial or business activities (other than primarily owning or operating real property) with total non-contingent liquidated secured and unsecured debts of $2,566,050 or less. A small business case, the debtor in possession must, among other things, attach the most recently prepared balance sheet, statement of operations, cash-flow statement and most recently filed tax return to the petition or provide a statement under oath explaining the absence of such documents and must attend court and the u. The small business debtor must make ongoing filings with the court concerning its profitability and projected cash receipts and disbursements, and must report whether it is in compliance with the bankruptcy code and the federal rules of bankruptcy procedure and whether it has paid its taxes and filed its tax returns. 308, contrast to other chapter 11 debtors, the small business debtor is subject to additional oversight by the u.
Early in the case, the small business debtor must attend an "initial interview" with the u. Trustee will evaluate the debtor's viability, inquire about the debtor's business plan, and explain certain debtor obligations including the debtor's responsibility to file various reports. Trustee will also monitor the activities of the small business debtor during the case to identify as promptly as possible whether the debtor will be unable to confirm a e certain filing deadlines are different and extensions are more difficult to obtain, a case designated as a small business case normally proceeds more quickly than other chapter 11 cases. For example, only the debtor may file a plan during the first 180 days of a small business case. This "exclusivity period" may be extended by the court, but only to 300 days, and only if the debtor demonstrates by a preponderance of the evidence that the court will confirm a plan within a reasonable period of time. When the case is not a small business case, however, the court may extend the exclusivity period "for cause" up to 18 single asset real estate asset real estate debtors are subject to special provisions of the bankruptcy code. The term "single asset real estate" is defined as "a single property or project, other than residential real property with fewer than four residential units, which generates substantially all of the gross income of a debtor who is not a family farmer and on which no substantial business is being conducted by a debtor other than the business of operating the real property and activities incidental. On request of a creditor with a claim secured by the single asset real estate and after notice and a hearing, the court will grant relief from the automatic stay to the creditor unless the debtor files a feasible plan of reorganization or begins making interest payments to the creditor within 90 days from the date of the filing of the case, or within 30 days of the court's determination that the case is a single asset real estate case. Case trustee is responsible for management of the property of the estate, operation of the debtor's business, and, if appropriate, the filing of a plan of reorganization. Section 1106 of the bankruptcy code requires the trustee to file a plan "as soon as practicable" or, alternatively, to file a report explaining why a plan will not be filed or to recommend that the case be converted to another chapter or dismissed. In some cases, the examiner may file a plan of reorganization, negotiate or help the parties negotiate, or review the debtor's schedules to determine whether some of the claims are improperly categorized. For example, when the debtor has no equity in the property and the property is not necessary for an effective reorganization, the secured creditor can seek an order of the court lifting the stay to permit the creditor to foreclose on the property, sell it, and apply the proceeds to the debt. The ordinary expenses of the ongoing business, however, continue to be debtor (unless a "small business debtor") has a 120-day period during which it has an exclusive right to file a plan. After the exclusivity period has expired, a creditor or the case trustee may file a competing plan.
The creditors' right to file a competing plan provides incentive for the debtor to file a plan within the exclusivity period and acts as a check on excessive delay in the debtor in possession or the trustee, as the case may be, has what are called "avoiding" powers. Avoiding powers prevent unfair prepetition payments to one creditor at the expense of all other collateral, adequate protection, and operating gh the preparation, confirmation, and implementation of a plan of reorganization is at the heart of a chapter 11 case, other issues may arise that must be addressed by the debtor in possession. The debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval, unless the court orders otherwise. If the intended sale or use is outside the ordinary course of its business, the debtor must obtain permission from the court. Continued operation of the debtor's business may lead to the filing of a number of contested motions. Delays in formulating, filing, and obtaining confirmation of a plan often prompt creditors to file motions for relief from stay, to convert the case to chapter 7, or to dismiss the case ary ntly, the debtor in possession will institute a lawsuit, known as an adversary proceeding, to recover money or property for the estate. At times, a creditors' committee may be authorized by the bankruptcy court to pursue these actions against insiders of the debtor if the plan provides for the committee to do so or if the debtor has refused a demand to do so. Creditors may also initiate adversary proceedings by filing complaints to determine the validity or priority of a lien, revoke an order confirming a plan, determine the dischargeability of a debt, obtain an injunction, or subordinate a claim of another bankruptcy code defines a claim as: (1) a right to payment; (2) or a right to an equitable remedy for a failure of performance if the breach gives rise to a right to payment. Listed by the debtor on the debtor's schedules) or is scheduled as disputed, contingent, or unliquidated must file a proof of claim (and attach evidence documenting the claim) in order to be treated as a creditor for purposes of voting on the plan and distribution under it. The notification also should advise such creditors of their right to file proofs of claim and that their failure to do so may prevent them from voting upon the debtor's plan of reorganization or participating in any distribution under that plan. An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. An equity security holder whose interest is not scheduled or is scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Additionally, failure to file a disclosure statement or to file and confirm a plan within the time fixed by the bankruptcy code or order of the court; inability to effectuate a plan; denial or revocation of confirmation; inability to consummate a confirmed plan represent "cause" for dismissal under the statute. Under this provision, the court is prohibited from converting a case involving a farmer or charitable institution to a liquidation case under chapter 7 unless the debt or requests the disclosure lly, the debtor (or any plan proponent) must file and get court approval of a written disclosure statement before there can be a vote on the plan of reorganization.
The disclosure statement must provide "adequate information" concerning the affairs of the debtor to enable the holder of a claim or interest to make an informed judgment about the plan. In a small business case, however, the court may determine that the plan itself contains adequate information and that a separate disclosure statement is unnecessary. Acceptance or rejection of a plan usually cannot be solicited until the court has first approved the written disclosure statement. An exception to this rule exists if the initial solicitation of the party occurred before the bankruptcy filing, as would be the case in so-called "prepackaged" bankruptcy plans (i. After the court approves the disclosure statement, the debtor or proponent of a plan can begin to solicit acceptances of the plan, and creditors may also solicit rejections of the approval of a disclosure statement, the plan proponent must mail the following to the u. Trustee and all creditors and equity security holders: (1) the plan, or a court approved summary of the plan; (2) the disclosure statement approved by the court; (3) notice of the time within which acceptances and rejections of the plan may be filed; and (4) such other information as the court may direct, including any opinion of the court approving the disclosure statement or a court-approved summary of the opinion. In addition, the debtor must mail to the creditors and equity security holders entitled to vote on the plan or plans: (1) notice of the time fixed for filing objections; (2) notice of the date and time for the hearing on confirmation of the plan; and (3) a ballot for accepting or rejecting the plan and, if appropriate, a designation for the creditors to identify their preference among competing plans. But in a small business case, the court may conditionally approve a disclosure statement subject to final approval after notice and a combined disclosure statement/plan confirmation hearing. Of the plan of noted earlier, only the debtor may file a plan of reorganization during the first 120-day period after the petition is filed (or after entry of the order for relief, if an involuntary petition was filed). In addition, the debtor has 180 days after the petition date or entry of the order for relief to obtain acceptances of its plan. In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. Such a plan may compete with a plan filed by another party in interest or by the debtor. If a trustee is appointed, the trustee must file a plan, a report explaining why the trustee will not file a plan, or a recommendation for conversion or dismissal of the case. A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and a chapter 11 case, a liquidating plan is permissible.
Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation. It also permits the creditors to take a more active role in fashioning the liquidation of the assets and the distribution of the proceeds than in a chapter 7 n 1123(a) of the bankruptcy code lists the mandatory provisions of a chapter 11 plan, and section 1123(b) lists the discretionary provisions. Section 1123(a)(1) provides that a chapter 11 plan must designate classes of claims and interests for treatment under the reorganization. Generally, a plan will classify claim holders as secured creditors, unsecured creditors entitled to priority, general unsecured creditors, and equity security section 1126(c) of the bankruptcy code, an entire class of claims is deemed to accept a plan if the plan is accepted by creditors that hold at least two-thirds in amount and more than one-half in number of the allowed claims in the class. Under section 1129(a)(10), if there are impaired classes of claims, the court cannot confirm a plan unless it has been accepted by at least one class of non-insiders who hold impaired claims (i. Moreover, under section 1126(f), holders of unimpaired claims are deemed to have accepted the section 1127(a) of the bankruptcy code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11. When there is a proposed modification after balloting has been conducted, and the court finds after a hearing that the proposed modification does not adversely affect the treatment of any creditor who has not accepted the modification in writing, the modification is deemed to have been accepted by all creditors who previously accepted the plan. If it is determined that the proposed modification does have an adverse effect on the claims of non-consenting creditors, then another balloting must take e more than one plan may be submitted to the creditors for approval, every proposed plan and modification must be dated and identified with the name of the entity or entities submitting the plan or modification. When competing plans are presented that meet the requirements for confirmation, the court must consider the preferences of the creditors and equity security holders in determining which plan to party in interest may file an objection to confirmation of a plan. The bankruptcy code requires the court, after notice, to hold a hearing on confirmation of a plan. If no objection to confirmation has been timely filed, the bankruptcy code allows the court to determine whether the plan has been proposed in good faith and according to law. In order to confirm the plan, the court must find, among other things, that: (1) the plan is feasible; (2) it is proposed in good faith; and (3) the plan and the proponent of the plan are in compliance with the bankruptcy code. In order to satisfy the feasibility requirement, the court must find that confirmation of the plan is not likely to be followed by liquidation (unless the plan is a liquidating plan) or the need for further financial n 1141(d)(1) generally provides that confirmation of a plan discharges a debtor from any debt that arose before the date of confirmation. After the plan is confirmed, the debtor is required to make plan payments and is bound by the provisions of the plan of reorganization.
The confirmed plan creates new contractual rights, replacing or superseding pre-bankruptcy are, of course, exceptions to the general rule that an order confirming a plan operates as a discharge. Confirmation of a plan of reorganization discharges any type of debtor – corporation, partnership, or individual – from most types of prepetition debts. 1) moreover, except in limited circumstances, a discharge is not available to an individual debtor unless and until all payments have been made under the plan. Confirmation does not discharge the debtor if the plan is a liquidation plan, as opposed to one of reorganization, unless the debtor is an individual. When the debtor is an individual, confirmation of a liquidation plan will result in a discharge (after plan payments are made) unless grounds would exist for denying the debtor a discharge if the case were proceeding under chapter 7 instead of chapter 11. Modification of the any time after confirmation and before "substantial consummation" of a plan, the proponent of a plan may modify the plan if the modified plan would meet certain bankruptcy code requirements. A modified postconfirmation plan in a chapter 11 case becomes the plan only "if circumstances warrant such modification" and the court, after notice and hearing, confirms the plan as modified. If the debtor is an individual, the plan may be modified postconfirmation upon the request of the debtor, the trustee, the u. Trustee, or the holder of an allowed unsecured claim to make adjustments to payments due under the plan. This authority would include the postconfirmation determination of objections to claims or adversary proceedings, which must be resolved before a plan can be fully consummated. Sections 1106(a)(7) and 1107(a) of the bankruptcy code require a debtor in possession or a trustee to report on the progress made in implementing a plan after confirmation. A chapter 11 trustee or debtor in possession has a number of responsibilities to perform after confirmation, including consummating the plan, reporting on the status of consummation, and applying for a final tion of the confirmation tion of the confirmation order is an undoing or cancellation of the confirmation of a plan. Court type-- court type --districtbankruptcyprobation and pretrial servicesdefendersappealsstate, city or are herehome » guide to managing human resources » section 2: managing successfully » chapter 10: reorganizations » steps in managing a in managing a ine whether existing jobs and structures are meeting department er what factors contribute to effectiveness of jobs and fy methods for collecting input from , written, and computer m-solving fy a new structure or model that will support your goals, including:Distribution of functions throughout the organization (definition of functions to be performed, groupings of functions, and the relationships among functions). A reorganization proposal, including:Reasons for and after organization descriptions for new, changed , titles of employees to be affected by changed or eliminated jobs, new reporting lines, physical relocation, or reduction in of affirmative action of potential layoffs for career positions based on seniority s to go to fy the different groups who will need communication and the different messages/information they will ine series of review and update meetings with ine schedule of informational meetings with communications outside department to announce up individual meetings with employees projected for layoff and for those employees whose jobs will change ine skills needed for each e current skills with what is ine training needs and and implement , reassess, and gather input during ine methods to get feedback during e systems that will provide regular feedback from management, staff, and client an effective team (also see chapter 14, team building).
Mission, goals, and standards for le regular staff tate communication by remaining open to suggestions and as harmonizing influence by looking for opportunities to mediate and resolve minor age all team members to share t brainstorming and consensus decision-making where ance to reorganization ›.