Legal Question in Bankruptcy in Delaware

Exclusivity in bankruptcy

In Chapter 11 cases, the debtor is given a period of time when only it (and not creditorsor other interested parties) can propose a plan of reorganization. That period is fixedby the Bankruptcy Code as 120 days after theorder for relief (the filing date; or the dateof conversion if converted from another chapter, or the date of the order granting an involuntary petition). If the debtor files aplan within the 120-day period, other entitiesare precluded from filing within 180 days fromthe order for relief (to give the debtor timeto try to get its plan confirmed). In cases designated as small business cases, the exclusivity period is 100 days. In any case,the 100-, 120-, and 180- day periods may be extended or shortened by the court on motion.It is normal to extend it in large cases.Appointment of a Chapter 11 trustee ends theexclusivity period. See section 1121 of the bankruptcy code.