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Bankruptcy Code

11 U.S.C. 1101, et seq.

11 U.S.C. CHAPTER 11 - REORGANIZATION

SUBCHAPTER I - OFFICERS AND ADMINISTRATION

Sec.

1101. Definitions for this chapter.

1102. Creditors' and equity security holders' committees.

1103. Powers and duties of committees.

1104. Appointment of trustee or examiner.

1105. Termination of trustee's appointment.

1106. Duties of trustee and examiner.

1107. Rights, powers, and duties of debtor in possession.

1108. Authorization to operate business.

1109. Right to be heard.

1110. Aircraft equipment and vessels.

1111. Claims and interests.

1112. Conversion or dismissal.

1113. Rejection of collective bargaining agreements.

1114. Payment of insurance benefits to retired employees.

SUBCHAPTER II - THE PLAN

1121. Who may file a plan.

1122. Classification of claims or interests.

1123. Contents of plan.

1124. Impairment of claims or interests.

1125. Postpetition disclosure and solicitation.

1126. Acceptance of plan.

1127. Modification of plan.

1128. Confirmation hearing.

1129. Confirmation of plan.

SUBCHAPTER III - POSTCONFIRMATION MATTERS

1141. Effect of confirmation.

1142. Implementation of plan.

1143. Distribution.

1144. Revocation of an order of confirmation.

1145. Exemption from securities laws.

1146. Special tax provisions.

SUBCHAPTER IV - RAILROAD REORGANIZATION

1161. Inapplicability of other sections.

1162. Definition.

1163. Appointment of trustee.

1164. Right to be heard.

1165. Protection of the public interest.

1166. Effect of subtitle IV of title 49 and of Federal, State, or

local regulations.

1167. Collective bargaining agreements.

1168. Rolling stock equipment.

1169. Effect of rejection of lease of railroad line.

1170. Abandonment of railroad line.

1171. Priority claims.

1172. Contents of plan.

1173. Confirmation of plan.

1174. Liquidation.

11 USC SUBCHAPTER I - OFFICERS AND ADMINISTRATION

Sec. 1101. Definitions for this chapter

In this chapter -

(1) ''debtor in possession'' means debtor except when a person

that has qualified under section 322 of this title is serving as

trustee in the case;

(2) ''substantial consummation'' means -

(A) transfer of all or substantially all of the property

proposed by the plan to be transferred;

(B) assumption by the debtor or by the successor to the

debtor under the plan of the business or of the management of

all or substantially all of the property dealt with by the

plan; and

Sec. 1102. Creditors' and equity security holders' committees

(a)(1) Except as provided in paragraph (3), as soon as

practicable after the order for relief under chapter 11 of this

title, the United States trustee shall appoint a committee of

creditors holding unsecured claims and may appoint additional

committees of creditors or of equity security holders as the United

States trustee deems appropriate.

(2) On request of a party in interest, the court may order the

appointment of additional committees of creditors or of equity

security holders if necessary to assure adequate representation of

creditors or of equity security holders. The United States trustee

shall appoint any such committee.

(3) On request of a party in interest in a case in which the

debtor is a small business and for cause, the court may order that

a committee of creditors not be appointed.

(b)(1) A committee of creditors appointed under subsection (a) of

this section shall ordinarily consist of the persons, willing to

serve, that hold the seven largest claims against the debtor of the

kinds represented on such committee, or of the members of a

committee organized by creditors before the commencement of the

case under this chapter, if such committee was fairly chosen and is

representative of the different kinds of claims to be represented.

(2) A committee of equity security holders appointed under

subsection (a)(2) of this section shall ordinarily consist of the

persons, willing to serve, that hold the seven largest amounts of

equity securities of the debtor of the kinds represented on such

committee.

Sec. 1103. Powers and duties of committees

(a) At a scheduled meeting of a committee appointed under section

1102 of this title, at which a majority of the members of such

committee are present, and with the court's approval, such

committee may select and authorize the employment by such committee

of one or more attorneys, accountants, or other agents, to

represent or perform services for such committee.

(b) An attorney or accountant employed to represent a committee

appointed under section 1102 of this title may not, while employed

by such committee, represent any other entity having an adverse

interest in connection with the case. Representation of one or

more creditors of the same class as represented by the committee

shall not per se constitute the representation of an adverse

interest.

(1) consult with the trustee or debtor in possession concerning

the administration of the case;

(2) investigate the acts, conduct, assets, liabilities, and

financial condition of the debtor, the operation of the debtor's

business and the desirability of the continuance of such

business, and any other matter relevant to the case or to the

formulation of a plan;

(3) participate in the formulation of a plan, advise those

represented by such committee of such committee's determinations

as to any plan formulated, and collect and file with the court

acceptances or rejections of a plan;

(4) request the appointment of a trustee or examiner under

section 1104 of this title; and

(5) perform such other services as are in the interest of those

represented.

(d) As soon as practicable after the appointment of a committee

under section 1102 of this title, the trustee shall meet with such

committee to transact such business as may be necessary and proper.

Sec. 1104. Appointment of trustee or examiner

(a) At any time after the commencement of the case but before

confirmation of a plan, on request of a party in interest or the

United States trustee, and after notice and a hearing, the court

shall order the appointment of a trustee -

(1) for cause, including fraud, dishonesty, incompetence, or

gross mismanagement of the affairs of the debtor by current

management, either before or after the commencement of the case,

or similar cause, but not including the number of holders of

securities of the debtor or the amount of assets or liabilities

of the debtor; or

(2) if such appointment is in the interests of creditors, any

equity security holders, and other interests of the estate,

without regard to the number of holders of securities of the

debtor or the amount of assets or liabilities of the debtor.

(b) Except as provided in section 1163 of this title, on the

request of a party in interest made not later than 30 days after

the court orders the appointment of a trustee under subsection (a),

the United States trustee shall convene a meeting of creditors for

the purpose of electing one disinterested person to serve as

trustee in the case. The election of a trustee shall be conducted

in the manner provided in subsections (a), (b), and (c) of section

702 of this title.

under this section, then at any time before the confirmation of a

plan, on request of a party in interest or the United States

trustee, and after notice and a hearing, the court shall order the

appointment of an examiner to conduct such an investigation of the

debtor as is appropriate, including an investigation of any

allegations of fraud, dishonesty, incompetence, misconduct,

mismanagement, or irregularity in the management of the affairs of

the debtor of or by current or former management of the debtor, if

(1) such appointment is in the interests of creditors, any

equity security holders, and other interests of the estate; or

(2) the debtor's fixed, liquidated, unsecured debts, other than

debts for goods, services, or taxes, or owing to an insider,

exceed $5,000,000.

(d) If the court orders the appointment of a trustee or an

examiner, if a trustee or an examiner dies or resigns during the

case or is removed under section 324 of this title, or if a trustee

fails to qualify under section 322 of this title, then the United

States trustee, after consultation with parties in interest, shall

appoint, subject to the court's approval, one disinterested person

other than the United States trustee to serve as trustee or

examiner, as the case may be, in the case.

Sec. 1105. Termination of trustee's appointment

At any time before confirmation of a plan, on request of a party

in interest or the United States trustee, and after notice and a

hearing, the court may terminate the trustee's appointment and

restore the debtor to possession and management of the property of

the estate and of the operation of the debtor's business.

Sec. 1106. Duties of trustee and examiner

(a) A trustee shall -

(1) perform the duties of a trustee specified in sections

704(2), 704(5), 704(7), 704(8), and 704(9) of this title;

(2) if the debtor has not done so, file the list, schedule, and

statement required under section 521(1) of this title;

(3) except to the extent that the court orders otherwise,

investigate the acts, conduct, assets, liabilities, and financial

condition of the debtor, the operation of the debtor's business

and the desirability of the continuance of such business, and any

other matter relevant to the case or to the formulation of a

plan;

(4) as soon as practicable -

(A) file a statement of any investigation conducted under

paragraph (3) of this subsection, including any fact

ascertained pertaining to fraud, dishonesty, incompetence,

misconduct, mismanagement, or irregularity in the management of

the affairs of the debtor, or to a cause of action available to

the estate; and

(B) transmit a copy or a summary of any such statement to any

creditors' committee or equity security holders' committee, to

any indenture trustee, and to such other entity as the court

designates;

(5) as soon as practicable, file a plan under section 1121 of

this title, file a report of why the trustee will not file a

plan, or recommend conversion of the case to a case under chapter

7, 12, or 13 of this title or dismissal of the case;

(6) for any year for which the debtor has not filed a tax

return required by law, furnish, without personal liability, such

information as may be required by the governmental unit with

which such tax return was to be filed, in light of the condition

of the debtor's books and records and the availability of such

information; and

(7) after confirmation of a plan, file such reports as are

necessary or as the court orders.

(b) An examiner appointed under section 1104(d) of this title

shall perform the duties specified in paragraphs (3) and (4) of

subsection (a) of this section, and, except to the extent that the

court orders otherwise, any other duties of the trustee that the

court orders the debtor in possession not to perform.

Sec. 1107. Rights, powers, and duties of debtor in possession

(a) Subject to any limitations on a trustee serving in a case

under this chapter, and to such limitations or conditions as the

court prescribes, a debtor in possession shall have all the rights,

other than the right to compensation under section 330 of this

title, and powers, and shall perform all the functions and duties,

except the duties specified in sections 1106(a)(2), (3), and (4) of

this title, of a trustee serving in a case under this chapter.

(b) Notwithstanding section 327(a) of this title, a person is not

disqualified for employment under section 327 of this title by a

debtor in possession solely because of such person's employment by

or representation of the debtor before the commencement of the

case.

Sec. 1108. Authorization to operate business

Unless the court, on request of a party in interest and after

notice and a hearing, orders otherwise, the trustee may operate the

debtor's business.

Sec. 1109. Right to be heard

(a) The Securities and Exchange Commission may raise and may

appear and be heard on any issue in a case under this chapter, but

the Securities and Exchange Commission may not appeal from any

judgment, order, or decree entered in the case.

(b) A party in interest, including the debtor, the trustee, a

creditors' committee, an equity security holders' committee, a

creditor, an equity security holder, or any indenture trustee, may

raise and may appear and be heard on any issue in a case under this

chapter.

Sec. 1110. Aircraft equipment and vessels

(a)(1) Except as provided in paragraph (2) and subject to

subsection (b), the right of a secured party with a security

interest in equipment described in paragraph (3), or of a lessor or

conditional vendor of such equipment, to take possession of such

equipment in compliance with a security agreement, lease, or

conditional sale contract, and to enforce any of its other rights

or remedies, under such security agreement, lease, or conditional

sale contract, to sell, lease, or otherwise retain or dispose of

such equipment, is not limited or otherwise affected by any other

provision of this title or by any power of the court.

(2) The right to take possession and to enforce the other rights

and remedies described in paragraph (1) shall be subject to section

362 if -

(A) before the date that is 60 days after the date of the order

for relief under this chapter, the trustee, subject to the

approval of the court, agrees to perform all obligations of the

debtor under such security agreement, lease, or conditional sale

contract; and

(B) any default, other than a default of a kind specified in

section 365(b)(2), under such security agreement, lease, or

conditional sale contract -

(i) that occurs before the date of the order is cured before

the expiration of such 60-day period;

(ii) that occurs after the date of the order and before the

expiration of such 60-day period is cured before the later of -

(I) the date that is 30 days after the date of the default;

(II) the expiration of such 60-day period; and

(iii) that occurs on or after the expiration of such 60-day

period is cured in compliance with the terms of such security

agreement, lease, or conditional sale contract, if a cure is

permitted under that agreement, lease, or contract.

(3) The equipment described in this paragraph -

(A) is -

(i) an aircraft, aircraft engine, propeller, appliance, or

spare part (as defined in section 40102 of title 49) that is

subject to a security interest granted by, leased to, or

conditionally sold to a debtor that, at the time such

transaction is entered into, holds an air carrier operating

certificate issued pursuant to chapter 447 of title 49 for

aircraft capable of carrying 10 or more individuals or 6,000

pounds or more of cargo; or

(ii) a documented vessel (as defined in section 30101(1) of

title 46) that is subject to a security interest granted by,

leased to, or conditionally sold to a debtor that is a water

carrier that, at the time such transaction is entered into,

holds a certificate of public convenience and necessity or

permit issued by the Department of Transportation; and

(B) includes all records and documents relating to such

equipment that are required, under the terms of the security

agreement, lease, or conditional sale contract, to be surrendered

or returned by the debtor in connection with the surrender or

return of such equipment.

(4) Paragraph (1) applies to a secured party, lessor, or

conditional vendor acting in its own behalf or acting as trustee or

otherwise in behalf of another party.

(b) The trustee and the secured party, lessor, or conditional

vendor whose right to take possession is protected under subsection

(a) may agree, subject to the approval of the court, to extend the

60-day period specified in subsection (a)(1).

(c)(1) In any case under this chapter, the trustee shall

immediately surrender and return to a secured party, lessor, or

conditional vendor, described in subsection (a)(1), equipment

described in subsection (a)(3), if at any time after the date of

the order for relief under this chapter such secured party, lessor,

or conditional vendor is entitled pursuant to subsection (a)(1) to

take possession of such equipment and makes a written demand for

such possession to the trustee.

(2) At such time as the trustee is required under paragraph (1)

to surrender and return equipment described in subsection (a)(3),

any lease of such equipment, and any security agreement or

conditional sale contract relating to such equipment, if such

security agreement or conditional sale contract is an executory

contract, shall be deemed rejected.

(d) With respect to equipment first placed in service on or

before October 22, 1994, for purposes of this section -

(1) the term ''lease'' includes any written agreement with

respect to which the lessor and the debtor, as lessee, have

expressed in the agreement or in a substantially contemporaneous

writing that the agreement is to be treated as a lease for

Federal income tax purposes; and

(2) the term ''security interest'' means a purchase-money

equipment security interest.

Sec. 1111. Claims and interests

(a) A proof of claim or interest is deemed filed under section

501 of this title for any claim or interest that appears in the

schedules filed under section 521(1) or 1106(a)(2) of this title,

except a claim or interest that is scheduled as disputed,

contingent, or unliquidated.

(b)(1)(A) A claim secured by a lien on property of the estate

shall be allowed or disallowed under section 502 of this title the

same as if the holder of such claim had recourse against the debtor

on account of such claim, whether or not such holder has such

recourse, unless -

(i) the class of which such claim is a part elects, by at least

two-thirds in amount and more than half in number of allowed

claims of such class, application of paragraph (2) of this

subsection; or

(ii) such holder does not have such recourse and such property

is sold under section 363 of this title or is to be sold under

the plan.

(B) A class of claims may not elect application of paragraph (2)

of this subsection if -

(i) the interest on account of such claims of the holders of

such claims in such property is of inconsequential value; or

(ii) the holder of a claim of such class has recourse against

the debtor on account of such claim and such property is sold

under section 363 of this title or is to be sold under the plan.

(2) If such an election is made, then notwithstanding section

506(a) of this title, such claim is a secured claim to the extent

that such claim is allowed.

Sec. 1112. Conversion or dismissal

(a) The debtor may convert a case under this chapter to a case

under chapter 7 of this title unless -

(1) the debtor is not a debtor in possession;

(2) the case originally was commenced as an involuntary case

under this chapter; or

(3) the case was converted to a case under this chapter other

than on the debtor's request.

(b) Except as provided in subsection (c) of this section, on

request of a party in interest or the United States trustee or

bankruptcy administrator, and after notice and a hearing, the court

may convert a case under this chapter to a case under chapter 7 of

this title or may dismiss a case under this chapter, whichever is

in the best interest of creditors and the estate, for cause,

including -

(1) continuing loss to or diminution of the estate and absence

of a reasonable likelihood of rehabilitation;

(2) inability to effectuate a plan;

(3) unreasonable delay by the debtor that is prejudicial to

creditors;

(4) failure to propose a plan under section 1121 of this title

within any time fixed by the court;

(5) denial of confirmation of every proposed plan and denial of

a request made for additional time for filing another plan or a

modification of a plan;

(6) revocation of an order of confirmation under section 1144

of this title, and denial of confirmation of another plan or a

modified plan under section 1129 of this title;

(7) inability to effectuate substantial consummation of a

confirmed plan;

(8) material default by the debtor with respect to a confirmed

plan;

(9) termination of a plan by reason of the occurrence of a

condition specified in the plan; or

(10) nonpayment of any fees or charges required under chapter

123 of title 28.

under chapter 7 of this title if the debtor is a farmer or a

corporation that is not a moneyed, business, or commercial

corporation, unless the debtor requests such conversion.

(d) The court may convert a case under this chapter to a case

under chapter 12 or 13 of this title only if -

(1) the debtor requests such conversion;

(2) the debtor has not been discharged under section 1141(d) of

this title; and

(3) if the debtor requests conversion to chapter 12 of this

title, such conversion is equitable.

(e) Except as provided in subsections (c) and (f), the court, on

request of the United States trustee, may convert a case under this

chapter to a case under chapter 7 of this title or may dismiss a

case under this chapter, whichever is in the best interest of

creditors and the estate if the debtor in a voluntary case fails to

file, within fifteen days after the filing of the petition

commencing such case or such additional time as the court may

allow, the information required by paragraph (1) of section 521,

including a list containing the names and addresses of the holders

of the twenty largest unsecured claims (or of all unsecured claims

if there are fewer than twenty unsecured claims), and the

approximate dollar amounts of each of such claims.

(f) Notwithstanding any other provision of this section, a case

may not be converted to a case under another chapter of this title

unless the debtor may be a debtor under such chapter.

Sec. 1113. Rejection of collective bargaining agreements

(a) The debtor in possession, or the trustee if one has been

appointed under the provisions of this chapter, other than a

trustee in a case covered by subchapter IV of this chapter and by

title I of the Railway Labor Act, may assume or reject a collective

bargaining agreement only in accordance with the provisions of this

section.

(b)(1) Subsequent to filing a petition and prior to filing an

application seeking rejection of a collective bargaining agreement,

the debtor in possession or trustee (hereinafter in this section

''trustee'' shall include a debtor in possession), shall -

(A) make a proposal to the authorized representative of the

employees covered by such agreement, based on the most complete

and reliable information available at the time of such proposal,

which provides for those necessary modifications in the employees

benefits and protections that are necessary to permit the

reorganization of the debtor and assures that all creditors, the

debtor and all of the affected parties are treated fairly and

equitably; and

(B) provide, subject to subsection (d)(3), the representative

of the employees with such relevant information as is necessary

to evaluate the proposal.

(2) During the period beginning on the date of the making of a

proposal provided for in paragraph (1) and ending on the date of

the hearing provided for in subsection (d)(1), the trustee shall

meet, at reasonable times, with the authorized representative to

confer in good faith in attempting to reach mutually satisfactory

modifications of such agreement.

collective bargaining agreement only if the court finds that -

(1) the trustee has, prior to the hearing, made a proposal that

fulfills the requirements of subsection (b)(1);

(2) the authorized representative of the employees has refused

to accept such proposal without good cause; and

(3) the balance of the equities clearly favors rejection of

such agreement.

(d)(1) Upon the filing of an application for rejection the court

shall schedule a hearing to be held not later than fourteen days

after the date of the filing of such application. All interested

parties may appear and be heard at such hearing. Adequate notice

shall be provided to such parties at least ten days before the date

of such hearing. The court may extend the time for the

commencement of such hearing for a period not exceeding seven days

where the circumstances of the case, and the interests of justice

require such extension, or for additional periods of time to which

the trustee and representative agree.

(2) The court shall rule on such application for rejection within

thirty days after the date of the commencement of the hearing. In

the interests of justice, the court may extend such time for ruling

for such additional period as the trustee and the employees'

representative may agree to. If the court does not rule on such

application within thirty days after the date of the commencement

of the hearing, or within such additional time as the trustee and

the employees' representative may agree to, the trustee may

terminate or alter any provisions of the collective bargaining

agreement pending the ruling of the court on such application.

(3) The court may enter such protective orders, consistent with

the need of the authorized representative of the employee to

evaluate the trustee's proposal and the application for rejection,

as may be necessary to prevent disclosure of information provided

to such representative where such disclosure could compromise the

position of the debtor with respect to its competitors in the

industry in which it is engaged.

(e) If during a period when the collective bargaining agreement

continues in effect, and if essential to the continuation of the

debtor's business, or in order to avoid irreparable damage to the

estate, the court, after notice and a hearing, may authorize the

trustee to implement interim changes in the terms, conditions,

wages, benefits, or work rules provided by a collective bargaining

agreement. Any hearing under this paragraph shall be scheduled in

accordance with the needs of the trustee. The implementation of

such interim changes shall not render the application for rejection

moot.

(f) No provision of this title shall be construed to permit a

trustee to unilaterally terminate or alter any provisions of a

collective bargaining agreement prior to compliance with the

provisions of this section.

Sec. 1114. Payment of insurance benefits to retired employees

(a) For purposes of this section, the term ''retiree benefits''

means payments to any entity or person for the purpose of providing

or reimbursing payments for retired employees and their spouses and

dependents, for medical, surgical, or hospital care benefits, or

benefits in the event of sickness, accident, disability, or death

under any plan, fund, or program (through the purchase of insurance

or otherwise) maintained or established in whole or in part by the

debtor prior to filing a petition commencing a case under this

title.

(b)(1) For purposes of this section, the term ''authorized

representative'' means the authorized representative designated

pursuant to subsection (c) for persons receiving any retiree

benefits covered by a collective bargaining agreement or subsection

(d) in the case of persons receiving retiree benefits not covered

by such an agreement.

(2) Committees of retired employees appointed by the court

pursuant to this section shall have the same rights, powers, and

duties as committees appointed under sections 1102 and 1103 of this

title for the purpose of carrying out the purposes of sections 1114

and 1129(a)(13) and, as permitted by the court, shall have the

power to enforce the rights of persons under this title as they

relate to retiree benefits.

(c)(1) A labor organization shall be, for purposes of this

section, the authorized representative of those persons receiving

any retiree benefits covered by any collective bargaining agreement

to which that labor organization is signatory, unless (A) such

labor organization elects not to serve as the authorized

representative of such persons, or (B) the court, upon a motion by

any party in interest, after notice and hearing, determines that

different representation of such persons is appropriate.

(2) In cases where the labor organization referred to in

paragraph (1) elects not to serve as the authorized representative

of those persons receiving any retiree benefits covered by any

collective bargaining agreement to which that labor organization is

signatory, or in cases where the court, pursuant to paragraph (1)

finds different representation of such persons appropriate, the

court, upon a motion by any party in interest, and after notice and

a hearing, shall appoint a committee of retired employees if the

debtor seeks to modify or not pay the retiree benefits or if the

court otherwise determines that it is appropriate, from among such

persons, to serve as the authorized representative of such persons

under this section.

(d) The court, upon a motion by any party in interest, and after

notice and a hearing, shall appoint a committee of retired

employees if the debtor seeks to modify or not pay the retiree

benefits or if the court otherwise determines that it is

appropriate, to serve as the authorized representative, under this

section, of those persons receiving any retiree benefits not

covered by a collective bargaining agreement.

(e)(1) Notwithstanding any other provision of this title, the

debtor in possession, or the trustee if one has been appointed

under the provisions of this chapter (hereinafter in this section

''trustee'' shall include a debtor in possession), shall timely pay

and shall not modify any retiree benefits, except that -

(A) the court, on motion of the trustee or authorized

representative, and after notice and a hearing, may order

modification of such payments, pursuant to the provisions of

subsections (g) and (h) of this section, or

(B) the trustee and the authorized representative of the

recipients of those benefits may agree to modification of such

payments,

after which such benefits as modified shall continue to be paid by

the trustee.

(2) Any payment for retiree benefits required to be made before a

plan confirmed under section 1129 of this title is effective has

the status of an allowed administrative expense as provided in

section 503 of this title.

(f)(1) Subsequent to filing a petition and prior to filing an

application seeking modification of the retiree benefits, the

trustee shall -

(A) make a proposal to the authorized representative of the

retirees, based on the most complete and reliable information

available at the time of such proposal, which provides for those

necessary modifications in the retiree benefits that are

necessary to permit the reorganization of the debtor and assures

that all creditors, the debtor and all of the affected parties

are treated fairly and equitably; and

(B) provide, subject to subsection (k)(3), the representative

of the retirees with such relevant information as is necessary to

evaluate the proposal.

(2) During the period beginning on the date of the making of a

proposal provided for in paragraph (1), and ending on the date of

the hearing provided for in subsection (k)(1), the trustee shall

meet, at reasonable times, with the authorized representative to

confer in good faith in attempting to reach mutually satisfactory

modifications of such retiree benefits.

(g) The court shall enter an order providing for modification in

the payment of retiree benefits if the court finds that -

(1) the trustee has, prior to the hearing, made a proposal that

fulfills the requirements of subsection (f);

(2) the authorized representative of the retirees has refused

to accept such proposal without good cause; and

(3) such modification is necessary to permit the reorganization

of the debtor and assures that all creditors, the debtor, and all

of the affected parties are treated fairly and equitably, and is

clearly favored by the balance of the equities;

except that in no case shall the court enter an order providing for

such modification which provides for a modification to a level

lower than that proposed by the trustee in the proposal found by

the court to have complied with the requirements of this subsection

and subsection (f): Provided, however, That at any time after an

order is entered providing for modification in the payment of

retiree benefits, or at any time after an agreement modifying such

benefits is made between the trustee and the authorized

representative of the recipients of such benefits, the authorized

representative may apply to the court for an order increasing those

benefits which order shall be granted if the increase in retiree

benefits sought is consistent with the standard set forth in

paragraph (3): Provided further, That neither the trustee nor the

authorized representative is precluded from making more than one

motion for a modification order governed by this subsection.

(h)(1) Prior to a court issuing a final order under subsection

(g) of this section, if essential to the continuation of the

debtor's business, or in order to avoid irreparable damage to the

estate, the court, after notice and a hearing, may authorize the

trustee to implement interim modifications in retiree benefits.

(2) Any hearing under this subsection shall be scheduled in

accordance with the needs of the trustee.

(3) The implementation of such interim changes does not render

the motion for modification moot.

(i) No retiree benefits paid between the filing of the petition

and the time a plan confirmed under section 1129 of this title

becomes effective shall be deducted or offset from the amounts

allowed as claims for any benefits which remain unpaid, or from the

amounts to be paid under the plan with respect to such claims for

unpaid benefits, whether such claims for unpaid benefits are based

upon or arise from a right to future unpaid benefits or from any

benefits not paid as a result of modifications allowed pursuant to

this section.

(j) No claim for retiree benefits shall be limited by section

502(b)(7) of this title.

(k)(1) Upon the filing of an application for modifying retiree

benefits, the court shall schedule a hearing to be held not later

than fourteen days after the date of the filing of such

application. All interested parties may appear and be heard at

such hearing. Adequate notice shall be provided to such parties at

least ten days before the date of such hearing. The court may

extend the time for the commencement of such hearing for a period

not exceeding seven days where the circumstances of the case, and

the interests of justice require such extension, or for additional

periods of time to which the trustee and the authorized

representative agree.

(2) The court shall rule on such application for modification

within ninety days after the date of the commencement of the

hearing. In the interests of justice, the court may extend such

time for ruling for such additional period as the trustee and the

authorized representative may agree to. If the court does not rule

on such application within ninety days after the date of the

commencement of the hearing, or within such additional time as the

trustee and the authorized representative may agree to, the trustee

may implement the proposed modifications pending the ruling of the

court on such application.

(3) The court may enter such protective orders, consistent with

the need of the authorized representative of the retirees to

evaluate the trustee's proposal and the application for

modification, as may be necessary to prevent disclosure of

information provided to such representative where such disclosure

could compromise the position of the debtor with respect to its

competitors in the industry in which it is engaged.

(l) This section shall not apply to any retiree, or the spouse or

dependents of such retiree, if such retiree's gross income for the

twelve months preceding the filing of the bankruptcy petition

equals or exceeds $250,000, unless such retiree can demonstrate to

the satisfaction of the court that he is unable to obtain health,

medical, life, and disability coverage for himself, his spouse, and

his dependents who would otherwise be covered by the employer's

insurance plan, comparable to the coverage provided by the employer

on the day before the filing of a petition under this title.

11 USC SUBCHAPTER II - THE PLAN

Sec. 1121. Who may file a plan

(a) The debtor may file a plan with a petition commencing a

voluntary case, or at any time in a voluntary case or an

involuntary case.

(b) Except as otherwise provided in this section, only the debtor

may file a plan until after 120 days after the date of the order

for relief under this chapter.

creditors' committee, an equity security holders' committee, a

creditor, an equity security holder, or any indenture trustee, may

file a plan if and only if -

(1) a trustee has been appointed under this chapter;

(2) the debtor has not filed a plan before 120 days after the

date of the order for relief under this chapter; or

(3) the debtor has not filed a plan that has been accepted,

before 180 days after the date of the order for relief under this

chapter, by each class of claims or interests that is impaired

under the plan.

(d) On request of a party in interest made within the respective

periods specified in subsections (b) and (c) of this section and

after notice and a hearing, the court may for cause reduce or

increase the 120-day period or the 180-day period referred to in

this section.

(e) In a case in which the debtor is a small business and elects

to be considered a small business -

(1) only the debtor may file a plan until after 100 days after

the date of the order for relief under this chapter;

(2) all plans shall be filed within 160 days after the date of

the order for relief; and

(3) on request of a party in interest made within the

respective periods specified in paragraphs (1) and (2) and after

notice and a hearing, the court may -

(A) reduce the 100-day period or the 160-day period specified

in paragraph (1) or (2) for cause; and

(B) increase the 100-day period specified in paragraph (1) if

the debtor shows that the need for an increase is caused by

circumstances for which the debtor should not be held

accountable.

SUBCHAPTER II - THE PLAN

Sec. 1122. Classification of claims or interests

(a) Except as provided in subsection (b) of this section, a plan

may place a claim or an interest in a particular class only if such

claim or interest is substantially similar to the other claims or

interests of such class.

(b) A plan may designate a separate class of claims consisting

only of every unsecured claim that is less than or reduced to an

amount that the court approves as reasonable and necessary for

administrative convenience.

Sec. 1123. Contents of plan

(a) Notwithstanding any otherwise applicable nonbankruptcy law, a

plan shall -

(1) designate, subject to section 1122 of this title, classes

of claims, other than claims of a kind specified in section

507(a)(1), 507(a)(2), or 507(a)(8) of this title, and classes of

interests;

(2) specify any class of claims or interests that is not

impaired under the plan;

(3) specify the treatment of any class of claims or interests

that is impaired under the plan;

(4) provide the same treatment for each claim or interest of a

particular class, unless the holder of a particular claim or

interest agrees to a less favorable treatment of such particular

claim or interest;

(5) provide adequate means for the plan's implementation, such

as -

(A) retention by the debtor of all or any part of the

property of the estate;

(B) transfer of all or any part of the property of the estate

to one or more entities, whether organized before or after the

confirmation of such plan;

persons;

(D) sale of all or any part of the property of the estate,

either subject to or free of any lien, or the distribution of

all or any part of the property of the estate among those

having an interest in such property of the estate;

(E) satisfaction or modification of any lien;

(F) cancellation or modification of any indenture or similar

instrument;

(G) curing or waiving of any default;

(H) extension of a maturity date or a change in an interest

rate or other term of outstanding securities;

(I) amendment of the debtor's charter; or

(J) issuance of securities of the debtor, or of any entity

referred to in subparagraph (B) or (C) of this paragraph, for

cash, for property, for existing securities, or in exchange for

claims or interests, or for any other appropriate purpose;

(6) provide for the inclusion in the charter of the debtor, if

the debtor is a corporation, or of any corporation referred to in

paragraph (5)(B) or (5)(C) of this subsection, of a provision

prohibiting the issuance of nonvoting equity securities, and

providing, as to the several classes of securities possessing

voting power, an appropriate distribution of such power among

such classes, including, in the case of any class of equity

securities having a preference over another class of equity

securities with respect to dividends, adequate provisions for the

election of directors representing such preferred class in the

event of default in the payment of such dividends; and

(7) contain only provisions that are consistent with the

interests of creditors and equity security holders and with

public policy with respect to the manner of selection of any

officer, director, or trustee under the plan and any successor to

such officer, director, or trustee.

(b) Subject to subsection (a) of this section, a plan may -

(1) impair or leave unimpaired any class of claims, secured or

unsecured, or of interests;

(2) subject to section 365 of this title, provide for the

assumption, rejection, or assignment of any executory contract or

unexpired lease of the debtor not previously rejected under such

section;

(3) provide for -

(A) the settlement or adjustment of any claim or interest

belonging to the debtor or to the estate; or

(B) the retention and enforcement by the debtor, by the

trustee, or by a representative of the estate appointed for

such purpose, of any such claim or interest;

(4) provide for the sale of all or substantially all of the

property of the estate, and the distribution of the proceeds of

such sale among holders of claims or interests;

(5) modify the rights of holders of secured claims, other than

a claim secured only by a security interest in real property that

is the debtor's principal residence, or of holders of unsecured

claims, or leave unaffected the rights of holders of any class of

claims; and

(6) include any other appropriate provision not inconsistent

with the applicable provisions of this title.

entity other than the debtor may not provide for the use, sale, or

lease of property exempted under section 522 of this title, unless

the debtor consents to such use, sale, or lease.

(d) Notwithstanding subsection (a) of this section and sections

506(b), 1129(a)(7), and 1129(b) of this title, if it is proposed in

a plan to cure a default the amount necessary to cure the default

shall be determined in accordance with the underlying agreement and

applicable nonbankruptcy law.

Sec. 1124. Impairment of claims or interests

Except as provided in section 1123(a)(4) of this title, a class

of claims or interests is impaired under a plan unless, with

respect to each claim or interest of such class, the plan -

(1) leaves unaltered the legal, equitable, and contractual

rights to which such claim or interest entitles the holder of

such claim or interest; or

(2) notwithstanding any contractual provision or applicable law

that entitles the holder of such claim or interest to demand or

receive accelerated payment of such claim or interest after the

occurrence of a default -

(A) cures any such default that occurred before or after the

commencement of the case under this title, other than a default

of a kind specified in section 365(b)(2) of this title;

(B) reinstates the maturity of such claim or interest as such

maturity existed before such default;

damages incurred as a result of any reasonable reliance by such

holder on such contractual provision or such applicable law;

and

(D) does not otherwise alter the legal, equitable, or

contractual rights to which such claim or interest entitles the

holder of such claim or interest.

Sec. 1125. Postpetition disclosure and solicitation

(a) In this section -

(1) ''adequate information'' means information of a kind, and

in sufficient detail, as far as is reasonably practicable in

light of the nature and history of the debtor and the condition

of the debtor's books and records, that would enable a

hypothetical reasonable investor typical of holders of claims or

interests of the relevant class to make an informed judgment

about the plan, but adequate information need not include such

information about any other possible or proposed plan; and

(2) ''investor typical of holders of claims or interests of the

relevant class'' means investor having -

(A) a claim or interest of the relevant class;

(B) such a relationship with the debtor as the holders of

other claims or interests of such class generally have; and

other than the disclosure required by this section as holders

of claims or interests in such class generally have.

(b) An acceptance or rejection of a plan may not be solicited

after the commencement of the case under this title from a holder

of a claim or interest with respect to such claim or interest,

unless, at the time of or before such solicitation, there is

transmitted to such holder the plan or a summary of the plan, and a

written disclosure statement approved, after notice and a hearing,

by the court as containing adequate information. The court may

approve a disclosure statement without a valuation of the debtor or

an appraisal of the debtor's assets.

holder of a claim or interest of a particular class, but there may

be transmitted different disclosure statements, differing in

amount, detail, or kind of information, as between classes.

(d) Whether a disclosure statement required under subsection (b)

of this section contains adequate information is not governed by

any otherwise applicable nonbankruptcy law, rule, or regulation,

but an agency or official whose duty is to administer or enforce

such a law, rule, or regulation may be heard on the issue of

whether a disclosure statement contains adequate information. Such

an agency or official may not appeal from, or otherwise seek review

of, an order approving a disclosure statement.

(e) A person that solicits acceptance