Confirmation Hearing
A Confirmation Hearing is the Chapter 11 court hearing required by Section 1128 at which the court determines whether a proposed plan satisfies the applicable confirmation requirements and considers objections from parties in interest.
How it works
Section 1128 requires a hearing after notice. Rule 2002 generally requires at least 28 days’ notice of the time to object and the confirmation hearing, subject to applicable exceptions and court orders. Rule 3020 governs confirmation objections and hearing procedure. Even a consensual plan is not confirmed merely because voting classes accepted it; the court must independently determine the applicable Section 1129 requirements.
Every Chapter 11 plan requires a confirmation hearing
Section 1128(a) states that, after notice, the court shall hold a hearing on confirmation.
Parties in interest may object
Section 1128(b) expressly permits parties in interest to object to plan confirmation.
The court tests Section 1129 requirements
Issues can include feasibility, good faith, best interests, classification, voting, priority treatment and cramdown standards.
Notice is part of due process
Rule 2002 generally requires at least 28 days’ notice of the confirmation objection deadline and hearing in Chapter 11.
Worked example: accepted plan still faces scrutiny
All impaired voting classes accept, but the plan fails to provide required treatment for a priority claim. The court cannot simply rely on the favorable vote and ignore the statutory defect.
Evidence can range from declarations to trial testimony
Depending on objections, confirmation can be a short uncontested hearing or a multi-day evidentiary trial involving valuation experts.
Common mistakes
Assuming class acceptance guarantees confirmation; treating the hearing as ceremonial; ignoring notice requirements; and confusing the Confirmation Hearing with the disclosure-statement hearing.
Example
A plan receives overwhelming creditor support. At the Confirmation Hearing, the debtor presents evidence on feasibility, good faith, voting results and plan treatment. A creditor objects to classification and releases. The court resolves those issues before deciding whether to enter the Confirmation Order.
Example
A plan receives overwhelming creditor support. At the Confirmation Hearing, the debtor presents evidence on feasibility, good faith, voting results and plan treatment. A creditor objects to classification and releases. The court resolves those issues before deciding whether to enter the Confirmation Order.
Professional note
Voting results are evidence, not the final legal decision. Confirmation remains a judicial determination under Sections 1128 and 1129.
Related terms
- Confirmation Order
A Confirmation Order is the bankruptcy court order confirming a Chapter 11 plan after the court determines that the applicable confirmation requirements have been satisfied.
- Feasibility Test
The Feasibility Test is the Chapter 11 confirmation requirement in Section 1129(a)(11) that a confirmed plan not be likely to lead to liquidation or another financial reorganization unless that liquidation or reorganization is itself proposed in the plan.
- Class Acceptance
Class Acceptance is the Chapter 11 voting determination under Section 1126 that establishes whether a class of claims or interests has accepted a proposed plan based on the votes actually cast by eligible holders.
- Good Faith Confirmation
Good Faith Confirmation is the Section 1129(a)(3) requirement that a Chapter 11 plan be proposed in good faith and not by any means forbidden by law before the court may confirm it.
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