Filing and Approval of a Disclosure Statement

In debtor-in-possession proceedings, a disclosure statement is a document that gives detailed information about a company’s financial situation and plans to repay debts. The debtor (the company) files this statement with the bankruptcy court, outlining how it intends to reorganize. The court reviews the statement for clarity and adequacy, ensuring creditors and stakeholders can make informed decisions about a proposed plan. Once approved by the court, this statement allows the company to proceed with its reorganization plan, providing a structured method to get back on track financially while addressing outstanding obligations.