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In a Chapter 11 bankruptcy case, the debtor in possession is required to propose a plan of reorganization within 120 days of filing. This deadline can often be extended by the court for valid reasons. The bankruptcy code mandates certain provisions that must be included in the plan, along with various permissible provisions. Once the plan is drafted, the debtor must also prepare a notice, similar to a disclosure statement in securities filings, containing operational, structural, and financial details about the debtor. This notice and the plan must be submitted to the court for approval. Court approval is necessary before the plan can be distributed to creditors.
