Opinion
Case No. 06-55754.
March 2, 2007
ORDER REQUIRING DEBTOR TO AMEND DISCLOSURE STATEMENT
On February 27, 2007, Debtor filed a plan and disclosure statement, in a document entitled "Combined Plan and Disclosure Statement Of Glenn Richard Underwood" (Docket # 64.) The Court cannot yet grant preliminary approval of the disclosure statement contained within this document ("Disclosure Statement"). The Court notes the following problems, which Debtor must correct.
First, the Plan, on page 19, describes "Voting Class I — Secured Debt." It states, in relevant part: "This class shall not be impaired." Debtor must amend the Plan so that it states, as to all creditors in this class, either (1) that the Plan leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder of such claim or interest, see 11 U.S.C. § 1124(a)(1); or (2) how the conditions of 11 U.S.C. § 1124(a)(2) are satisfied; or (3) that this class is impaired under the Plan. If Debtor's amended plan states that this class is impaired, Debtor may reserve the right to argue at the confirmation hearing that Voting Class I is unimpaired.
Second, the Disclosure Statement at Paragraph C on page 7 describes litigation in which Debtor is currently involved, as well as potential claims that Debtor may pursue. However, Debtor does not include and value these claims in his liquidation analysis. Debtor must estimate the value of these claims, considering the amount of any expected recovery, net of any future expected costs of such litigation. Debtor must then include the estimated net value of any claims he has in the liquidation analysis.
Third, the Disclosure Statement contains summaries of financial information for the years 2004 and 2005. Debtor must also provide a summary of financial information for 2006, including the 2006 pre-petition period.
Fourth, the Disclosure Statement at pages 10-11 describes voting procedures. On page 11, it states: "After carefully reviewing the Plan and disclosure statement, each holder of such a claim or interest should vote on the enclosed ballot either to accept or reject the Plan, and then return the ballot by mail to the Clerk of the Court by the deadline established by the Court." (Emphasis added.) Debtor must delete the bolded language, and replace it with the following: "to the Debtor's attorney by the deadline previously established by the Court."
Fifth, the Plan at Article VII on page 23 states:
Except to the extent provided in the Plan or in the Order of the Court confirming the Plan, on the Effective Date, Debtor shall be discharged and released from (I) any and all debts arising or incurred prior to the Confirmation Date, and (ii) any and all debts of the kind specified in 11 U.S.C. §§ 502(g), 502(h) or 502(I).
Unless Debtor amends the Plan to make this discharge provision consistent with 11 U.S.C. § 1141(d)(5)(A), Debtor must add the following language:
11 U.S.C. § 1141(d)(5)(A) states:
(5) In a case in which the debtor is an individual —
(A) unless after notice and a hearing the court orders otherwise for cause, confirmation of the plan does not discharge any debt provided for in the plan until the court grants a discharge on completion of all payments under the plan.
Debtor contends that cause exists to grant a discharge on the effective date. Such cause is __________.
Accordingly,
IT IS ORDERED that Debtor must file, no later than March 9, 2007, an amended combined plan and disclosure statement which corrects the above stated problems.
IT IS FURTHER ORDERED that Debtor also must provide to Judge's chambers, no later than March 9, 2007, a redlined version of the amended combined plan and disclosure statement, showing the changes Debtor has made to the "Combined Plan and Disclosure Statement Of Glenn Richard Underwood" filed February 27, 2007. Debtor must submit this redlined document to chambers electronically, through the Court's order submission program.