By Thomas Moers Mayer and Nancy M. Bello (Kramer Levin)
Companies in Chapter 11 must publicly report substantial financial information — indeed, more information should be reported or available publicly in Chapter 11 than outside of Chapter 11. Although public Chapter 11 debtors must continue to file Securities Exchange Commission (“SEC”) reporting, there are some exceptions. First, if the issuer meets certain criteria, the SEC will generally accept the debtor’s filing Form 8-Ks containing the monthly operating reports (“MORs”) required under Section 704 of the Bankruptcy Code and Bankruptcy Rule 2015 in lieu of annual and quarterly reports on Forms 10-K and 10-Q. Second, a debtor can generally opt to terminate its reporting obligations by de-registering its equity securities that have been registered under Section 12 of the Exchange Act.
A debtor who stops reporting under the securities laws is nevertheless required to publicly report substantial information under the Bankruptcy Code and Rules – information which is in some ways more detailed, more informative and more frequently provided than reports under the securities laws. This article analyzes what information must be publicly reported or disclosed under the securities laws, the Bankruptcy Code and Bankruptcy Rules; what debtors do to minimize public reporting; and what creditors can do to get the public reporting they deserve.
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