11 U.S.C. Section 1129 -- Confirmation of Chapter 11 Plan

What Is Section 1129?

Section 1129 of Title 11 of the United States Code (Confirmation of Plan (Chapter 11)) is a foundational provision of the Bankruptcy Code. It lists the 16 requirements that must be met before a Chapter 11 plan can be confirmed by the court. This is the culmination of the Chapter 11 process -- the plan becomes binding on all parties once confirmed.

Key Provisions of Section 1129

Key confirmation requirements under 1129(a):

• 1129(a)(1): The plan must comply with all applicable provisions of the Bankruptcy Code.
• 1129(a)(3) -- Good Faith: The plan must be proposed in good faith and not by any means forbidden by law.
• 1129(a)(7) -- Best Interests Test: Each holder of an impaired claim must receive at least as much as they would in a Chapter 7 liquidation.
• 1129(a)(8): Each class must either accept the plan or be unimpaired (paid in full).
• 1129(a)(11) -- Feasibility: Confirmation is not likely to be followed by the need for further reorganization or liquidation of the debtor.
• 1129(b) -- Cramdown: If at least one impaired class accepts, the plan can be confirmed over the objection of other classes if it is "fair and equitable" and does not discriminate unfairly. This includes the absolute priority rule for unsecured creditors.

How This Affects You

Section 1129 is where the rubber meets the road in Chapter 11:

• Best interests test: No creditor can be forced to accept less than they would get in Chapter 7 liquidation. This baseline comparison drives plan design.
• Feasibility: The court must be convinced the debtor can actually perform the plan. Overly optimistic projections are grounds for denial of confirmation.
• Cramdown power: If the debtor cannot get all classes to accept, cramdown under 1129(b) allows confirmation anyway -- but only if at least one impaired class votes to accept and the plan satisfies "fair and equitable" treatment for dissenting classes.

Related Bankruptcy Code Sections

Section 1129 works in conjunction with several other provisions of the Bankruptcy Code:

• Section 1125 -- Disclosure statement (precedes confirmation)
• Section 1141 -- Effect of confirmation
• Section 1112 -- Dismissal if plan fails

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