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may also apply to post-confirmation services if in connection with the plan and in contemplation at the time of its confirmation.48
Certain disclosures concerning future management are required as a condition of confirmation. The Code requires the proponent to disclose the identity and affiliations of any individual proposed to serve, after confirmation, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor participating in a joint plan with the debtor, or a successor to the debtor under the plan. § 1129(a)(5)(A)(i). The proponent must also disclose any insider who will be employed or retained by the reorganized debtor and the nature of any compensation for that insider. § 1129(a)(5)(B). The appointment to or continuance in office of any individual who is going to serve as a director, officer, or voting trustee, must be "consistent with the interests of creditors and equity security holders and with public policy."
§ 1129(a)(5)(A)(ii). "There is precious little case authority on this subsection since the enactment of the Code, and no cases at all which analyze how it works."49
A plan cannot be confirmed unless regulatory commissions having jurisdiction over the rates of the debtor have approved any rate changes provided for in the plan or the rate change is conditioned on that approval. § 1129(a)(6). Neither the reorganization court nor the reorganization plan may supersede state and federal regulatory bodies, at least insofar as
48
In re American Freight Systems, Inc., 205 B.R. 290 (D. Kan. 1996)(but plan provision excepting out certain services is res judicata if the plan is nevertheless confirmed and not appealed).
49
In re American Solar King Corp., 90 B.R. 808, 815 n.8 (Bankr. W.D. Tex. 1988)("If there is no proposed slate of directors as yet, there is simply nothing further for the debtor to disclose under subsection (a)(5)(A)(i)."). In re American Freight Systems, Inc., 205 B.R. 290 (D. Kan. 1996)("It is extremely doubtful that § 1129(a)(5) would require the proponent of the plan to disclose such a tentative, speculative and inchoate agreement."); In re Sound Radio, Inc., 18 B.C.D. 788 (Bankr. D.
N.J. 1988) ("Section 1129(a) (5) does not require anything more than full and complete disclosure");"In re Sovereign Group, 1984-21 Ltd., 88 B.R. 325, 329 (Bankr. D. Colo. 1988) ("Under these sections [1129(a) (5) (A) and 1123(a) (7)], the Court is charged with weighing the interests of public policy together with the interest of the creditors in evaluating the proposed management of the restructured entity. However, no real guidance is given under these sections in determining the efficacy of restructuring a partnership in bankruptcy in accordance with a partnership agreement."); In re Toy & Sports Warehouse, Inc., 37 B.R. 141 (Bankr. S.D.N.Y. 1984)("There is no evidence that the continued service of the debtors' current management is inconsistent with the interests of creditors, equity security holders or public policy, as expressed in Code § 1129(a)(5)(A)(ii)."); In re W. E. Parks Lumber Co., Inc., 19 B.R. 285, 291-93 (Bankr W.D. La. 1982).
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