Generally speaking, 77-B provides that a corporation which is insolvent or unable to meet its debts as they mature, may file a petition for reorganization under the provisions of the Amendment, and may propose a Plan of Reorganization. The Plan must include provisions modifying or altering the rights of creditors generally, or of any class of them, and may include provisions modifying or altering the rights of stockholders generally. To make the Plan effective, 66 2/3% of each class of creditors affected by the Plan must file acceptances of the Plan, and if the corporation is not insolvent, 51% of each class of stockholders must file acceptances. The Judge before whom the proceedings are pending must also find that the Plan is fair and equitable, and does not discriminate unfairly in favor of any class of creditors or stockholders, and is feasible. If the Plan is confirmed by the Court, it becomes binding upon all creditors and stockholders, whether or not they have filed claims in the proceedings, and whether or not they have accepted the Plan of Reorganization.
Roger L. Shidler,
State Bar Journal,
Some Practical Aspects of Section 77-B of the Bankruptcy Act,
12 Wash. L. Rev. & St. B.J.
Available at: https://digitalcommons.law.uw.edu/wlr/vol12/iss2/7