11 U.S.C. Section 1121 -- Who May File a Plan in Chapter 11

What Is Section 1121?

Section 1121 of Title 11 of the United States Code (Who May File a Plan) is a foundational provision of the Bankruptcy Code. It gives the debtor in possession an exclusive period to file a Chapter 11 plan before creditors can propose competing plans. This exclusivity period is a critical strategic tool.

Key Provisions of Section 1121

Key provisions:

• 1121(a): The debtor may file a plan at any time during the case.
• 1121(b) -- Exclusivity Period: Only the debtor may file a plan during the first 120 days after the order for relief. The court may extend this period up to 18 months.
• 1121(c): After exclusivity expires, any party in interest (including creditors) may file a plan.
• 1121(e) -- Subchapter V: In Subchapter V cases, only the debtor may file a plan, and it must be filed within 90 days.

How This Affects You

Exclusivity is a powerful negotiating tool:

• During the exclusive period, creditors must negotiate with the debtor because they cannot propose their own plan
• Extensions of exclusivity are common and give the debtor more time to negotiate
• Once exclusivity expires, competing plans can create a "plan war" that the debtor may not win
• In Subchapter V, the 90-day filing deadline keeps cases moving fast

Related Bankruptcy Code Sections

Section 1121 works in conjunction with several other provisions of the Bankruptcy Code:

• Section 1125 -- Disclosure statement (filed with the plan)
• Section 1129 -- Confirmation of the plan

Understanding how these sections interact is critical for anyone navigating the bankruptcy process, whether as a debtor, creditor, or attorney.