Deemed Acceptance
Deemed Acceptance is the Section 1126(f) rule that conclusively presumes an unimpaired Chapter 11 class, and every holder in that class, to have accepted the plan without requiring solicitation of votes from that class.
How it works
A class is unimpaired when its legal, equitable and contractual rights are left unaltered within Section 1124 or otherwise satisfy the applicable statutory treatment. Section 1126(f) then removes the need to solicit ballots. Deemed Acceptance is a statutory consequence of unimpaired treatment, not a favorable vote actually cast by holders.
Section 1126(f) creates the presumption
An unimpaired class and each holder in it are conclusively presumed to accept the plan.
No solicitation is required
Because the Code supplies the acceptance result, the Plan Proponent does not need ballots from the class.
Deemed Acceptance differs from Class Acceptance
Class Acceptance is calculated from votes actually cast in an impaired voting class. Deemed Acceptance arises without balloting.
Impairment analysis comes first
Whether a class is truly unimpaired is determined under Section 1124 and the plan’s treatment, not merely the class label.
Worked example: full cash treatment
A $12 million class receives treatment sufficient to remain unimpaired. The class is deemed to accept even if individual holders dislike other plan provisions.
Why it matters for confirmation
A deemed accepting class does not satisfy Section 1129(a)(10), which requires acceptance by an impaired class when that requirement applies.
Common mistakes
Counting deemed acceptance as an affirmative ballot; assuming full payment eliminates every impairment issue; soliciting an unimpaired class as though its votes control; and using deemed acceptance for Section 1129(a)(10).
Example
A plan pays a class of allowed trade claims in full in cash on the Effective Date without changing their rights. If the class is unimpaired, Section 1126(f) conclusively presumes acceptance and holders do not submit ballots.
Example
A plan pays a class of allowed trade claims in full in cash on the Effective Date without changing their rights. If the class is unimpaired, Section 1126(f) conclusively presumes acceptance and holders do not submit ballots.
Professional note
The important dispute can be impairment itself. A class cannot become deemed accepting merely because the plan labels it unimpaired if protected rights are actually altered.
Related terms
- Unimpaired Class
An Unimpaired Class is a Chapter 11 class whose legal, equitable and contractual rights are left unaltered by the plan or otherwise receive treatment that satisfies Bankruptcy Code Section 1124.
- Section 1129(a)(10) Requirement
The Section 1129(a)(10) Requirement is the Chapter 11 confirmation rule that, when at least one class of claims is impaired, at least one impaired class of claims must accept the plan without counting acceptances by insiders.
- 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.
- Plan Ballot
A Plan Ballot is the written or court-approved electronic voting instrument used by an eligible creditor or equity holder to accept or reject a Chapter 11 plan and, where authorized, make related elections.
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