Attorney or Party Name, Address, Telephone & FAX Nos., State Bar No. & Email Address FOR COURT USE ONLY Individual appearing without attorney Attorney for: UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA - **SELECT DIVISION** In re: CASE NO.: CHAPTER: 11 DIVISION INDIVIDUAL DEBTOR'S DISCLOSURE STATEMENT IN SUPPORT OF PLAN OF REORGANIZATION DATE: TIME: COURTROOM: PLACE: Debtor(s). Attached is a chapter 11 plan (the Plan) proposed by the above-named individual Debtor. The Debtor attests that the information stated in this Disclosure Statement and the Plan is accurate. All creditors should refer to Articles I-IV of the Plan for the specific treatment of their claims. This Disclosure Statement is explanatory only; the language used in the Plan is binding. Your rights may be affected. You should read these papers carefully and discuss them with your attorney, if you have one. EFFECTIVE DATE OF THE PLAN: The Effective Date of the Plan is 14 days following the date of entry of the order confirming the Plan unless a stay of the confirmation order is in effect, in which case the Effective Date will be the first business day after the date on which the stay of the confirmation order has been lifted, provided that the confirmation order has not been vacated. This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California. December 2012 Page 1 F 2081-1.DISCLSR.STMT Part 1 Proposed Treatment of Claims A. Unclassified Claims including administrative priority claim, priority tax claims, and gap claims Holders of administrative priority claims are entitled to priority pursuant to § 507(a)(2) of the Bankruptcy Code including (i) professional fees and costs; (ii) United States trustee's fees; and (iii) postpetition domestic support obligations. Such claims shall be paid in full on, or as soon as practicable after, the Effective Date or upon allowance of such claim, whichever is later. Holders of priority tax claims are entitled to priority under § 507(a)(8). Such claims shall be paid in full over five years from the date of the entry of the order for relief with % interest in equal [monthly/quarterly/annually] amortized payments according to § 511 of the Bankruptcy Code. See Article I.C. of the Plan. Holders of involuntary gap period claims allowed under § 502(f) are entitled to priority under § 507(a)(3). Such claims will be paid in full on, or as soon as is practicable, after the Effective Date. See Article I.D. of the Plan. Involuntary gap priority creditors exist only in cases commenced involuntarily. These are creditors who have claims that arose after the involuntary petition was filed but prior to the court's appointing a trustee or granting an order for relief. B. Secured Creditors (Classes 2, 3, 4 and 5) See Article II of the Plan. C. Priority Unsecured Creditors The following class(es) of priority unsecured claims are impaired and therefore, entitled to vote under the Plan. Such creditors will be paid [annually/quarterly/monthly] in full over years with % interest. Payments shall be in equal [monthly/quarterly] amortizing installments beginning on the first day of each calendar month quarter after the Effective Date. Alternatively, if any one of these Classes does not vote to accept the Plan, then each claim in such class must be paid in full on, or as soon as practicable after, the Effective Date (except to the extent a holder of a claim in the class agrees to other terms) or the plan cannot be confirmed. See Article II of the Plan. Class 1(a): Class 1(b): Class 1(c): Class 1(d): Class 1(e): D. Domestic support obligation Priority wage claims Employee benefit plan contribution claims Grain producer and fisherman claims Consumer deposit claims. General Unsecured Creditors (Classes 6(a) and 6(b)) Class 6(a): A creditor whose allowed claim is $ or less or who elects to reduce its allowed claim to $ will receive a single payment equal to 100% of its allowed claim on, or as soon as practicable after, the Effective Date of the Plan. See Article II of the Plan. Class 6(b): Other general unsecured creditors will be paid % of their allowed claims with[out] interest [at the rate of % per annum], in equal [monthly][quarterly] installments over years. Under § 1129(a)(15), if an unsecured creditor objects to confirmation, an individual debtor must either pay the present value of that unsecured claim in full or make distributions under the plan totaling at least the value of the debtor's net disposable income over the greater of (a) five years or (b) the period for which the plan provides payments. However, § 1129(a)(15) should be read and applied in conjunction with § 1123(a)(4) which provides that a chapter 11 plan must provide the same treatment for each claim in the same particular class. See Article II of the Plan. Undisputed Class 6 claims, as of this date, are listed in Exhibit C to the Disclosure Statement. This form is optional. It has been approved for use in the United States Bankruptcy Court for the Central District of California. December 2012 Page 2 F 2081-1.DISCLSR.STMT E. Executory Contracts and Unexpired Leases (1) Executory Contracts and Leases Assumed. On the Effective Date, the Debtor assumes the executory contracts and unexpired leases enumerated in Exhibit E to the Disclosure Statement and shall perform all obligations thereunder, both preconfirmation and postconfirmation. Any preconfirmation arrearages shall be paid by the Effective Date, unless the parties agree otherwise or the court finds that a proposed payment schedule provides timely cure and adequate assurance of future performance. Postconfirmation obligations will be paid as they come due. (2) Executory Contracts and Leases Rejected. The Debtor is conclusively deemed to have rejected all executory contracts and/or unexpired leases not previously assumed or listed in Exhibit E to the Disclosure Statement as of the Effective Date. Claims arising from the rejection of an executory contract or unexpired lease under this section are general unsecured claims in Class 6, except to the extent this court orders otherwise. A proof of claim arising from the rejection of an executory contract or unexpired lease under this section must be filed no later than 30 days after the date of the order confirming this Plan. F. Discharge Upon completion of the payments under the Plan, the Debtor may receive a discharge of preconfirmation debts, except such dis