11 U.S.C. § 1122 — Classification of claims or interests

Page 256 TITLE 11—BANKRUPTCY § 1122 Editorial Notes AMENDMENTS 2005—Subsec. (d). Pub. L. 109–8, § 411, designated exist- ing provisions as par. (1), substituted ‘‘Subject to para- graph (2), on’’ for ‘‘On’’, and added par. (2). Subsec. (e). Pub. L. 109–8, § 437, added subsec. (e) and struck out former subsec. (e) which read as follows: ‘‘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 pe- riod specified in paragraph (1) or (2) for cause; and ‘‘(B) increase the 100-day period specified in para- graph (1) if the debtor shows that the need for an increase is caused by circumstances for which the debtor should not be held accountable.’’ 1994—Subsec. (e). Pub. L. 103–394 added subsec. (e). 1986—Subsec. (d). Pub. L. 99–554 inserted reference to subsection (b) of this section. 1984—Subsec. (c)(3). Pub. L. 98–353, § 506(a), sub- stituted ‘‘of claims or interests that is’’ for ‘‘the claims or interests of which are’’. Subsec. (d). Pub. L. 98–353, § 506(b), inserted ‘‘made within the respective periods specified in subsection (c) of this section’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. § 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 inter- est 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. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2631.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 This section codifies current case law surrounding the classification of claims and equity securities. It re- quires classification based on the nature of the claims or interests classified, and permits inclusion of claims or interests in a particular class only if the claim or in- terest being included is substantially similar to the other claims or interests of the class. Subsection (b), also a codification of existing prac- tice, contains an exception. The plan may designate a separate class of claims consisting only of every unse- cured claim that is less than or reduced to an amount that the court approves as reasonable and necessary for administrative convenience. § 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)(2), 507(a)(3), 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 im- plementation, 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 prop- erty of the estate to one or more entities, whether organized before or after the con- firmation of such plan; (C) merger or consolidation of the debtor with one or more 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 hav- ing an interest in such property of the es- tate; (E) satisfaction or modification of any lien; (F) cancellation or modification of any in- denture 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 prop- erty, for existing securities, or in exchange for claims or interests, or for any other ap- propriate 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 pro- hibiting the issuance of nonvoting equity se- curities, and providing, as to the several class- es of securities possessing voting power, an ap- propriate 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 re-