A bankruptcy plan approved by the debtor’s creditors before the debtor files its bankruptcy petition. Sometimes referred to as a “prepack.” The “prepack” can allow a debtor to begin and end the formal bankruptcy process in just a few days. It is usually employed when a debtor can obtain a majority in number and two-thirds in amount of acceptances from each class but not the unanimous acceptance that would be required to alter contractual rights outside of bankruptcy.
Prepackaged plans are favored by creditors and other parties in interest as a means of streamlining the bankruptcy process and reducing the expense of Chapter 11.
See also Acceptance of Plan, Accepting Class, Confirmation Requirements, Cramdown, Prenegotiated Plan.