ABI Commission to Study the Reform of Chapter 11
IV. Proposed Recommendations: Commencing the Case 45
cases under these other chapters, it believed that the Barton doctrine should apply to all cases and proceedings under the Bankruptcy Code.
6. valuation information packages
Recommended Principles:
• Except as provided in the principles for small and medium-sized enterprise cases, the debtor should compile a “valuation information package” (“VIP”) containing the following information: (i) tax returns for the previous three years (inclusive of all schedules); (ii) annual financial statements (audited if available) for the prior three years (inclusive of all footnotes); (iii) most recent independent appraisals of any of the debtor’s material assets (including any valuations of business enterprise or equity); and (iv) to the extent shared with prepetition creditors and existing or potential purchasers, investors, or lenders, all business plans or projections
prepared within the past two years.
• In connection with any motion filed under section 361, 362, 363, or 364 of the Bankruptcy Code or any chapter 11 plan filed within 60 days after the petition date or date of the order for relief, whichever is later, the debtor should file with the court a list of the information included in its VIP, unless the court orders otherwise for cause. A party in interest may request a copy of the VIP for a proper purpose, which includes the evaluation of the pending motion or proposed plan. Unless the court orders otherwise for cause, the debtor should provide a copy of the VIP promptly to any such requesting party, provided that the party executes a confidentiality agreement and, to the extent that the VIP contains material nonpublic information, agrees to restrict its trading activity in the debtor’s claims, interests, and securities. The debtor should be able to redact or withhold information otherwise included in its VIP to the extent that the debtor determines in good faith that such redaction is necessary to prevent harm to the estate, unless the court orders otherwise.
Valuation Information Packages: Background
A debtor is required to file a variety of forms, schedules, and other information upon commencement of its chapter 11 case or shortly thereafter. The Bankruptcy Code generally gives debtors a short grace period after the petition date to file the required forms,175 and debtors typically can request additional time for the filing of certain materials.176 Nevertheless, a debtor’s timely and full disclosure is a necessary component of the chapter 11 process. Without this basic information, the court, the U.S. Trustee, and parties in interest cannot assess the debtor’s reorganization efforts and make meaningful decisions in the case.
175 Fed. R. Bankr. P. 1007(c), (d). 176 Fed. R. Bankr. P. 1007(a)(5) (permitting extensions of deadlines upon a showing of cause).