MOW 3016-3.1 (05/07)

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF MISSOURI

IN RE: )

) Case No.

Debtor(s). )

Small Business Case under Chapter 11

**\[NAME OF PLAN PROPONENT\'S COMBINED PLAN AND DISCLOSURE STATEMENT,
DATED \[INSERT DATE\]**

Table of Contents

\[INSERT\]

**[I. INTRODUCTION]{.smallcaps}**

This is the combined Plan and Disclosure Statement (for ease of
reference, the combined Plan and Disclosure Statement will be referred
to as the "Plan") in the small business chapter 11 case of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (the \"Debtor\"). This Plan is filed under
chapter 11 of the Bankruptcy Code (the "Code") and proposes to pay
creditors of the Debtor from \[specify sources of payment, such as an
infusion of capital, loan proceeds, sale of assets, cash flow from
operations, or future income\]. This Plan provides for
\_\_\_\_\_\_\_\_\_\_ classes of secured claims; \_\_\_\_\_\_\_\_\_
classes of unsecured claims; and \_\_\_\_\_\_\_\_\_\_\_ classes of
equity security holders. Unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued at
approximately \_\_\_\_\_\_ cents on the dollar. The proposed
distributions are discussed at pages \_\_-\_\_ of this Plan. This Plan
also provides for the payment of administrative and priority claims.

All creditors and equity security holders should refer to Articles
\_\_\_ through \_\_\_ of this Plan for information regarding the precise
treatment of their claims.

This Plan also provides detailed information regarding the terms for
payment of the Debtor's creditors and other information designed to
assist creditors and equity security holders in determining whether to
accept the Plan. ***Your rights may be affected. You should read these
papers carefully and discuss them with your attorney, if you have one.
(If you do not have an attorney, you may wish to consult one.)***

**A. Purpose of This Document**

This Plan describes:

•  The Debtor and significant events during the bankruptcy case.

•  Historical information regarding the Debtor and the events leading to
its bankruptcy filing.

•  How the Plan proposes to treat claims or equity interests of the type
you hold (i.e., what you will receive on your claim or equity interest
if the Plan is confirmed).

•  Who can vote on or object to the Plan.

•  What factors the Bankruptcy Court (the \"Court\") will consider when
deciding whether to confirm the Plan.

•  Why \[the Proponent\] believes the Plan is feasible, and how the
treatment of your claim or equity interest under the Plan compares to
what you would receive on your claim or equity interest in liquidation.

•  The effect of confirmation of the Plan.

**B. Deadlines for Voting and Objecting; Date of Plan Confirmation
Hearing**

The Court has not yet confirmed the Plan. This section describes the
procedures under which the Plan will or will not be confirmed.

1\. Time and Place of the Hearing to Confirm the Plan/Approve Adequate
of Disclosure Statement

The hearing at which the Court will consider confirmation of the Plan
and determination of the adequacy of disclosure set forth in the Plan
will take place on \[[insert date]{.underline}\], at \[[insert
time]{.underline}\], in Courtroom \_\_\_\_, at the \[Insert Courthouse
Name, and Full Court Address, City, State, Zip Code\].

2\. Deadline For Voting to Accept or Reject the Plan

If you are entitled to vote to accept or reject the Plan, vote on the
enclosed ballot and return the ballot in the enclosed envelope to
\[insert address\]. See section IX.B. below for a discussion of voting
eligibility requirements.

Your ballot must be received by \[[insert date]{.underline}\] or it will
not be counted.

3\. Deadline For Objecting to the Adequacy of Disclosure and
Confirmation of the Plan

Objections to the adequacy of the disclosures stated in this Plan and to
confirmation of the Plan must be filed with the Court and served upon
\[insert entities\] by \[insert date\].

4\. Identity of Person to Contact for More Information

If you want additional information about the Plan, you should contact
\[insert name and address of representative of Plan proponent\].

**[II. BACKGROUND]{.smallcaps}**

**A. Description and History of the Debtor\'s Business**

The Debtor is a \[corporation, partnership, etc.\]. Since \[insert year
operations commenced\], the Debtor has been in the business of
\_\_\_\_\_\_\_\_\_\_ \[Describe the Debtor\'s business\].

**B. Insiders of the Debtor**

\[Insert a detailed list of the names of Debtor\'s insiders as defined
in Code §101(31) and an explanation of their relationships to the
Debtor. For each insider, list all compensation paid by the Debtor or
its affiliates to that person or entity during the two years prior to
the commencement of the Debtor\'s bankruptcy case, as well as
compensation paid during the pendency of this chapter 11 case.\]

**C. Management of the Debtor Before and During the Bankruptcy**

During the two years before the Debtor's bankruptcy petition was filed,
the officers, directors, managers or other persons in control of the
Debtor (collectively, the \"Managers\") were \[List the Managers of the
Debtor prior to the petition date\].

The Managers of the Debtor during the Debtor\'s chapter 11 case have
been: \[List Managers of the Debtor during the Debtor\'s chapter 11
case.\]

**D. Events Leading to the Debtor's Chapter 11 Filing**

\[Describe the events that led to the commencement of the Debtor\'s
bankruptcy case.\]

**E. Significant Events During the Bankruptcy Case**

\[Describe significant events during the Debtor\'s bankruptcy case:

• Describe any asset sales outside the ordinary course of business,
debtor in possession financing, or cash collateral orders.

• Identify the professionals approved by the court.

• Describe any adversary proceedings that have been filed or other
significant litigation that has occurred (including contested claim
disallowance proceedings), and any other significant legal or
administrative proceedings that are pending or have been pending during
the case in a forum other than the Court.

• Describe any steps taken to improve operations and profitability of
the Debtor.

• Describe other events as appropriate.\]

**F. Projected Recovery of Avoidable Transfers \[Choose the option that
applies\]**

*\[Option 1 --- If the Debtor does not intend to pursue avoidance
actions\]*

The Debtor does not intend to pursue preference, fraudulent conveyance,
or other avoidance actions.

*\[Option 2 --- If the Debtor intends to pursue avoidance actions\]*

The Debtor estimates that up to \$\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ may
be realized from the recovery of fraudulent, preferential or other
avoidable transfers. While the results of litigation cannot be predicted
with certainty and it is possible that other causes of action may be
identified, the following is a summary of the preference, fraudulent
conveyance and other avoidance actions filed or expected to be filed in
this case:

  ----------------------- ----------------------- -----------------------
  Transaction             Defendant               Amount Claimed

                                                  

                                                  
  ----------------------- ----------------------- -----------------------

*\[Option 3 --- If the Debtor does not yet know whether it intends to
pursue avoidance actions\]*

The Debtor has not yet completed its investigation with regard to
prepetition transactions. If you received a payment or other transfer
within 90 days of the bankruptcy or other transfer avoidable under the
Code, the Debtor may seek to avoid such transfer.

**G. Claims Objections**

Except to the extent that a claim is already allowed pursuant to a final
non-appealable order, the Debtor reserves the right to object to claims.
Therefore, even if your claim is allowed for voting purposes, you may
not be entitled to a distribution if an objection to your claim is later
upheld. The procedures for resolving disputed claims are stated in
Article \_\_\_ of the Plan.

**H. Current and Historical Financial Conditions**

The identity and fair market value of the estate\'s assets are listed in
**Exhibit A**. \[Identify source and basis of valuation.\]

The Debtor\'s most recent financial statements \[if any\] issued before
bankruptcy, each of which was filed with the Court, are set forth in
**Exhibit B**.

A summary of the Debtor\'s periodic operating reports filed since the
commencement of the Debtor\'s bankruptcy case is set forth in **Exhibit
D**.

**[III. THE PLAN OF REORGANIZATION AND TREATMENT OF CLAIMS AND EQUITY
INTERESTS]{.smallcaps}**

**A. What is the Purpose of the Plan of Reorganization?**

As required by the Code, the Plan places claims and equity interests in
various classes and describes the treatment each class will receive. The
Plan also states whether each class of claims or equity interests is
impaired or unimpaired. If the Plan is confirmed, your recovery will be
limited to the amount provided by the Plan.

**B. Explanation of Classes of Claims and Equity Interests**

1\. Classes of Secured Claims

Allowed Secured Claims are claims secured by property of the Debtor\'s
bankruptcy estate (or that are subject to setoff) to the extent allowed
as secured claims under Code § 506. If the value of the collateral or
setoffs securing the creditor\'s claim is less than the amount of the
creditor\'s allowed claim, the deficiency will \[be classified as a
general unsecured claim\].

2\. Classes of Priority Unsecured Claims

Certain priority claims that are referred to in Code §§ 507(a)(1), (4),
(5), (6), and (7) are required to be placed in classes. The Code
requires that each holder of such a claim receive cash on the effective
date of the Plan equal to the allowed amount of such claim. However, a
class of holders of such claims may vote to accept different treatment.

3\. Class\[es\]of General Unsecured Claims

General unsecured claims are not secured by property of the estate and
are not entitled to priority under Code § 507(a). \[Insert description
of § 1122(b) convenience class if applicable.\]

4\. Class\[es\] of Equity Interest Holders

Equity interest holders are parties who hold an ownership interest
(i.e., equity interest) in the Debtor. In a corporation, entities
holding preferred or common stock are equity interest holders. In a
partnership, equity interest holders include both general and limited
partners. In a limited liability company (\"LLC\"), the equity interest
holders are the members. Finally, with respect to an individual who is a
debtor, the Debtor is the equity interest holder.

**C. Overview - Treatment of Claims and Interests under Plan**

Claims and interests are treated as follows under this Plan:

+------------+----------------+----------------------------------------+
| Class      | Impairment     | Treatment                              |
+------------+----------------+----------------------------------------+
| Class 1 -- | \[State        | \[Insert treatment of priority claims  |
| Priority   | whether        | in this Class, including the form,     |
| Claims     | impaired or    | amount and timing of distribution, if  |
|            | unimpaired.\]  | any. For example: "Class I is          |
|            |                | unimpaired by this Plan, and each      |
|            |                | holder of a Class I Priority Claim     |
|            |                | will be paid in full, in cash, upon    |
|            |                | the later of the effective date of     |
|            |                | this Plan as defined in Article VII,   |
|            |                | or the date on which such claim is     |
|            |                | allowed by a final non appealable      |
|            |                | order.                                 |
|            |                | Exc                                    |
|            |                | ept:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_."\] |
+------------+----------------+----------------------------------------+
| Class 2 -- | \[State        | \[Insert treatment of secured claim in |
| Secured    | whether        | this Class, including the form, amount |
| Claim of   | impaired or    | and timing of distribution, if any.\]  |
| \[Insert   | unimpaired.\]  |                                        |
| name of    |                | \[Add class\[es\] of secured claims if |
| secured    |                | applicable\]                           |
| c          |                |                                        |
| reditor.\] |                |                                        |
+------------+----------------+----------------------------------------+
| Class 3 -- | \[State        | \[Insert treatment of unsecured        |
| General    | whether        | creditors in this Class, including the |
| Unsecured  | impaired or    | form, amount and timing of             |
| Creditors  | unimpaired.\]  | distribution, if any.\]                |
|            |                |                                        |
|            |                | \[Add administrative convenience class |
|            |                | if applicable\]                        |
+------------+----------------+----------------------------------------+
| Class 4 -- | \[State        | \[Insert treatment of equity security  |
| Equity     | whether        | holders in this Class, including the   |
| Security   | impaired or    | form, amount and timing of             |
| Holders of | unimpaired.\]  | distribution, if any.\]                |
| the Debtor |                |                                        |
+------------+----------------+----------------------------------------+

**D. Treatment of Unclassified Claims**

Certain types of claims are automatically entitled to specific treatment
under the Code. They are not considered impaired, and holders of such
claims do not vote on the Plan. They may, however, object if, in their
view, their treatment under the Plan does not comply with that required
by the Code. Accordingly, the Plan Proponent has not placed the
following claims in any class:

1\. Administrative Expenses

Administrative expenses are costs or expenses of administering the
Debtor\'s chapter 11 case which are allowed under Code § 507(a)(2).
Administrative expenses also include the value of any goods sold to the
Debtor in the ordinary course of business and received within 20 days
before the date of the bankruptcy petition. The Code requires that each
administrative expense claim be paid on the effective date of the Plan,
unless the holder of the claim agrees to a different treatment. As
reflected below, each holder of an administrative expense claim allowed
under Code § 503 \[, and a "gap" claim in an involuntary case allowed
under Code § 502(f),\] will be paid in full on the effective date of
this Plan, in cash, or upon such other terms as may be agreed upon by
the holder of the claim and the Debtor.

The following chart lists the Debtor\'s estimated administrative
expenses and their treatment under this Plan:

+-----------------------+-----------------------+-----------------------+
| Type                  | Estimated             | Proposed Treatment    |
|                       |                       |                       |
|                       | Amount Owed           |                       |
+-----------------------+-----------------------+-----------------------+
| Expenses Arising in   |                       | Paid in full on the   |
| the Ordinary Course   |                       | effective date of the |
| of Business After the |                       | Plan, or according to |
| Petition Date         |                       | terms of obligation   |
|                       |                       | if later              |
+-----------------------+-----------------------+-----------------------+
| The Value of Goods    |                       | Paid in full on the   |
| Received in the       |                       | effective date of the |
| Ordinary Course of    |                       | Plan, or according to |
| Business Within 20    |                       | terms of obligation   |
| Days Before the       |                       | if later              |
| Petition Date         |                       |                       |
+-----------------------+-----------------------+-----------------------+
| Professional Fees, as |                       | Paid in full on the   |
| approved by the Court |                       | effective date of the |
|                       |                       | Plan, or according to |
|                       |                       | separate written      |
|                       |                       | agreement, or         |
|                       |                       | according to court    |
|                       |                       | order if such fees    |
|                       |                       | have not been         |
|                       |                       | approved by the Court |
|                       |                       | on the effective date |
|                       |                       | of the Plan           |
+-----------------------+-----------------------+-----------------------+
| Clerk\'s Office Fees  |                       | Paid in full on the   |
|                       |                       | effective date of the |
|                       |                       | Plan                  |
+-----------------------+-----------------------+-----------------------+
| Other administrative  |                       | Paid in full on the   |
| expenses              |                       | effective date of the |
|                       |                       | Planor according to   |
|                       |                       | separate written      |
|                       |                       | agreement             |
+-----------------------+-----------------------+-----------------------+
| Office of the U.S.    |                       | Paid in full on the   |
| Trustee Fees          |                       | effective date of the |
|                       |                       | Plan                  |
+-----------------------+-----------------------+-----------------------+
| TOTAL                 |                       |                       |
+-----------------------+-----------------------+-----------------------+

2\. Priority Tax Claims

Priority tax claims are unsecured income, employment, and other taxes
described by Code § 507(a)(8). Unless the holder of such a § 507(a)(8)
priority tax claim agrees otherwise, it must receive the present value
of such claim, in regular installments paid over a period not exceeding
5 years from the order of relief.

The following chart lists the Debtor\'s estimated § 507(a)(8) priority
tax claims and their proposed treatment under the Plan:

+---------------------+------------+----------+-----------------------+
| Description         | Estimated  | Date of  | Treatment             |
|                     |            |          |                       |
| (name and type of   | Amount     | As       |                       |
| tax)                |            | sessment |                       |
|                     | Owed       |          |                       |
+---------------------+------------+----------+-----------------------+
|                     |            |          | Pmt interval =        |
|                     |            |          |                       |
|                     |            |          | \[Monthly\] payment = |
|                     |            |          |                       |
|                     |            |          | Begin date =          |
|                     |            |          |                       |
|                     |            |          | End date =            |
|                     |            |          |                       |
|                     |            |          | Interest Rate % =     |
|                     |            |          |                       |
|                     |            |          | Total Payout Amount   |
|                     |            |          | =\$                   |
+---------------------+------------+----------+-----------------------+

**E. Treatment of Classified Claims and Interests.**

[1.]{.smallcaps} Class 1: Priority Claims.

All allowed claims entitled to priority under Code § 507 (except
administrative expense claims under § 507(a)(2), \["gap" period claims
in an involuntary case under § 507(a)(3),\] and priority tax claims
under Code § 507(a)(8)) will be paid as follows \[insert treatment of
claims\].

2\. Class 2: Secured Claim of \[insert name of secured creditor\].

The claim of \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, to the
extent allowed as a secured claim under Code § 506 will be paid as
follows \[insert treatment of claim\].

\[Add other classes of secured creditors, if any. Note: Code §
1129(a)(9)(D) provides that a secured tax claim which would otherwise
meet the description of a priority tax claim under Code § 507(a)(8) is
to be paid in the same manner and over the same period as prescribed in
§ 507(a)(8).\]

3\. Class 3: All Unsecured Claims Allowed Under Code § 502.

Unsecured claims allowed under Code § 502 (other than Class 1 Priority
Claims) will be paid as follows \[insert treatment of claim\].

\[Add other classes of unsecured claims, if any.\]

4\. Class 4: Equity Interests in the Debtor.

Equity interests will be paid as follows \[insert treatment of equity
interests\].

\[If the Debtor is an individual --"The interests of the individual
Debtor in property of the estate."\]

**[F. TREATMENT OF U.S. TRUSTEE FEES]{.smallcaps}**

All fees required to be paid by 28 U.S.C. § 1930(a)(6) (U.S. Trustee
Fees) will accrue and be timely paid until the case is closed,
dismissed, or converted to another chapter of the Code. Any U.S. Trustee
Fees owed on or before the effective date of this Plan will be paid on
the effective date.

**[IV. ALLOWANCE AND DISALLOWANCE OF CLAIMS]{.smallcaps}**

**[A.]{.smallcaps} Disputed Claims**

A disputed claim is a claim that has not been allowed or disallowed \[by
a final non-appealable order\], and as to which either: (i) a proof of
claim has been filed or deemed filed, and the Debtor or another party in
interest has filed an objection; or (ii) no proof of claim has been
filed, and the Debtor has scheduled such claim as disputed, contingent,
or liquidated.

No distribution will be made on account of a disputed claim unless such
claim is allowed \[by a final non-appealable order\].

**B. Settlement of Disputed Claims**

The Debtor will have the power and authority to settle and compromise a
disputed claim with court approval and compliance with Rule 9019 of the
Federal Rules of Bankruptcy Procedure.

**[V. PROVISIONS FOR EXECUTORY CONTRACTS AND UNEXPIRED
LEASES]{.smallcaps}**

**A. Assumed Executory Contracts and Unexpired Leases**

The Debtor assumes the following executory contracts and/or unexpired
leases effective upon the \[Insert "effective date of this Plan," "the
date of the entry of the order confirming this Plan," or other
applicable date\]:

\[List assumed executory contracts and/or unexpired leases.\]

Assumption means that the Debtor has elected to continue to perform the
obligations under such executory contracts and unexpired leases, and to
cure defaults of the type that must be cured under the Code, if any.
**Exhibit C** also lists how the Debtor will cure and compensate the
other party to such contract or lease for any such defaults.

If you object to the assumption of your unexpired lease or executory
contract, the proposed cure of any defaults, or the adequacy of
assurance of performance, you must file and serve your objection to the
Plan within the deadline for objecting to the confirmation of the Plan,
unless the Court has set an earlier time.

**B. Rejected Executory Contracts and Unexpired Leases**

The Debtor will be conclusively deemed to have rejected all executory
contracts and unexpired leases that (a) are not expressly assumed under
section V.A. of this Plan or (b) were not assumed under a separate
motion before the effective date of this Plan. A proof of a claim
arising from the rejection of an executory contract or unexpired lease
under section V.A. of this Plan must be filed no later than thirty days
after the effective date of this Plan. Any claim based on the rejection
of a contract or lease will be barred if the proof of claim is not
timely filed, unless the Court orders otherwise.

All executory contracts and unexpired leases that are not listed as
being assumed will be rejected under the Plan. Consult your adviser or
attorney for more specific information about particular contracts or
leases. If you object to the rejection of your contract or lease, you
must file and serve your objection to the Plan within the deadline for
objecting to the confirmation of the Plan.

**[VI. GENERAL PROVISIONS]{.smallcaps}**

**A. Definitions and Rules of Construction**

The definitions and rules of construction stated in Code §§ 101 and 102
apply when terms defined or construed in the Code are used in this Plan,
and they are supplemented by the following definitions: \[Insert
additional definitions if necessary\].

**B. Effective Date of Plan**

The effective date of this Plan is the eleventh business day following
the date of the entry of the order of confirmation. But if a stay of the
confirmation order is in effect on that date, the effective date will be
the first business day after that date on which no stay of the
confirmation order is in effect, unless the confirmation order has been
vacated.

**C. Severability**

If any provision in this Plan is determined to be unenforceable, the
determination will in no way limit or affect the enforceability and
operative effect of any other provision of this Plan.

**D. Binding Effect**

The rights and obligations of any entity named or referred to in this
Plan will be binding upon and will inure to the benefit of the
successors or assigns of such entity.

**E. Captions**

The headings contained in this Plan are for convenience of reference
only and do not affect the meaning or interpretation of this Plan.

**F. Corporate Governance**

If the Debtor is a corporation include provisions required by Code §
1123(a)(6).

**[VII. OTHER PROVISIONS]{.smallcaps}**

\[Insert other provisions, as applicable.\]

**[VIII. MEANS OF IMPLEMENTING THE PLAN]{.smallcaps}**

**A. Source of Payments**

Payments and distributions under the Plan will be funded by the
following: \[Describe the source of funds for payments under the Plan.\]

**B. Post-Confirmation Management**

The Post-Confirmation Managers of the Debtor, and their compensation,
will be as follows:

  -------------- -------------- -------------- -------------- --------------
  Name           Affiliations   Insider (yes   Position       Compensation
                                or no)                        

                                                              

                                                              

                                                              

                                                              
  -------------- -------------- -------------- -------------- --------------

**C. Risk Factors**

The proposed Plan has the following risks:

\[List all risk factors that might affect the Debtor\'s ability to make
payments and other distributions required under the Plan.\]

**D. Tax Consequences of Plan**

Creditors and equity interest holders concerned with how the Plan may
affect their tax liability should consult with their accountants,
attorneys, or advisors. The following are the anticipated tax
consequences of the Plan: \[List the following general consequences as a
minimum: (1) Tax consequences to the Debtor of the Plan; (2) General tax
consequences on creditors of any discharge, and the general tax
consequences of receipt of Plan consideration after confirmation.)

**[IX. CONFIRMATION REQUIREMENTS AND PROCEDURES]{.smallcaps}**

**A. Overview of Requirements**

To be confirmable, the Plan must meet the requirements listed in Code §§
1129(a) or (b). These include the requirements that: the Plan must be
proposed in good faith; at least one impaired class of claims must
accept the plan, without counting votes of insiders; the Plan must
distribute to each creditor and equity interest holder at least as much
as the creditor or equity interest holder would receive in a chapter 7
liquidation case, unless the creditor or equity interest holder votes to
accept the Plan; and the Plan must be feasible. These requirements are
not the only requirements listed in Code § 1129, and they are not the
only requirements for confirmation.

**B. Who May Vote or Object**

Any party in interest may object to the confirmation of the Plan if the
party believes that the requirements for confirmation are not met.

Many parties in interest, however, are not entitled to vote to accept or
reject the Plan. A creditor or equity interest holder has a right to
vote for or against the Plan only if that creditor or equity interest
holder has a claim or equity interest that is both (1) allowed or
allowed for voting purposes and (2) impaired.

**C. What Is an Allowed Claim or an Allowed Equity Interest?**

Only a creditor or equity interest holder with an allowed claim or an
allowed equity interest has the right to vote on the Plan. Generally, a
claim or equity interest is allowed if either (l) the Debtor has
scheduled the claim on the Debtor\'s schedules, unless the claim has
been scheduled as disputed, contingent, or unliquidated, or (2) the
creditor has filed a proof of claim or equity interest, unless an
objection has been filed to such proof of claim or equity interest. When
a claim or equity interest is not allowed, the creditor or equity
interest holder holding the claim or equity interest cannot vote unless
the Court overrules the objection or allows the claim or equity interest
for voting purposes under Rule 3018(a) of the Federal Rules of
Bankruptcy Procedure.

The deadline for filing a proof of claim in this case
was\_\_\_\_\_\_\_\_\_.

\[If applicable --- The deadline for filing objections to claims is
\_\_\_\_\_\_\_\_\_.\]

**D. What Is an Impaired Claim or Impaired Equity Interest?**

As noted above, the holder of an allowed claim or equity interest has
the right to vote only if it is in a class that is impaired under the
Plan. As provided in Code § 1124, a class is considered impaired if the
Plan alters the legal, equitable, or contractual rights of the members
of that class.

**E. Who is Not Entitled to Vote**

The following types of creditors and equity interest holders are not
entitled to vote:

1\. Holders of Claims and equity interests that have been disallowed by
an order of the Court.

2\. Holders of other claims or equity interests that are not \"allowed
claims\" or \"allowed equity interests\" (as discussed above), unless
they have been \"allowed\" for voting purposes.

3\. Holders of claims or equity interests in unimpaired classes.

4\. Holders of claims entitled to priority pursuant to Code §§
507(a)(2), (a)(3), and (a)(8).

5\. Holders of claims or equity interests in classes that do not receive
or retain any value under the Plan.

6\. Holders of administrative expenses.

Even if you are not entitled to vote on the plan, you have a right to
object to the confirmation of the plan.

**F. Who Can Vote in More Than One Class**

A creditor whose claim has been allowed in part as a secured claim and
in part as an unsecured claim or who otherwise hold claims in multiple
classes, is entitled to accept or reject a Plan in each capacity, and
should cast one ballot for each claim.

**G. Votes Necessary to Confirm the Plan**

If impaired classes exists, the Court cannot confirm the Plan unless (1)
at least one impaired class of creditors has accepted the Plan without
counting the votes of any insiders within that class, and (2) all
impaired classes have voted to accept the Plan, unless the Plan is
eligible to be confirmed by \"cram down\" on non-accepting classes, as
discussed below in section G.2.

1\. Votes Necessary for a Class to Accept the Plan

A class of claims accepts the Plan if both of the following occur: (1)
the holders of more than one-half of the allowed claims in the class,
who vote, cast their votes to accept the Plan, and (2) the holders of at
least two-thirds in dollar amount of the allowed claims in the class,
who vote, cast their votes to accept the Plan.

A class of equity interests accepts the Plan if the holders of at least
two-thirds in amount of the allowed equity interests in the class, who
vote, cast their votes to accept the Plan.

> 2\. Treatment of Nonaccepting Classes

Even if one or more impaired classes reject the Plan, the Court may
nonetheless confirm the Plan if the nonaccepting classes are treated in
the manner prescribed by Code § 1129(b). A Plan that binds nonaccepting
classes is commonly referred to as a \"cram down\" plan. The Code allows
the Plan to bind nonaccepting classes of claims or equity interests if
it meets all the requirements for consensual confirmation except the
voting requirements of Code § 1129(a)(8), does not \"discriminate
unfairly,\" and is \"fair and equitable\" toward each impaired class
that has not voted to accept the Plan.

You should consult your own attorney if a "cramdown" confirmation will
affect your claim or equity interest, as the variations on this general
rule are numerous and complex.

**H. Liquidation Analysis**

To confirm the Plan, the Court must find that all creditors and equity
interest holders who do not accept the Plan will receive at least as
much under the Plan as such claim and equity interest holders would
receive in a chapter 7 liquidation. A liquidation analysis is attached
to this Disclosure Statement as **Exhibit E**.**I. Feasibility**

The Court must find that confirmation of the Plan is not likely to be
followed by the liquidation, or the need for further financial
reorganization, of the Debtor or any successor to the Debtor, unless
such liquidation or reorganization is proposed in the Plan.**J. Ability
to Initially Fund Plan**

The Plan Proponent believes that the Debtor will have enough cash on
hand on the effective date of the Plan to pay all the claims and
expenses that are entitled to be paid on that date. Tables showing the
amount of cash on hand on the effective date of the Plan, and the
sources of that cash are attached to as **Exhibit F**.

**K. Ability to Make Future Plan Payments And Operate Without Further
Reorganization**

The Plan Proponent must also show that it will have enough cash over the
life of the Plan to make the required Plan payments. The Plan Proponent
has provided projected financial information. Those projections are
listed in **Exhibit G**.

The Plan Proponent\'s financial projections show that the Debtor will
have an aggregate annual average cash flow, after paying operating
expenses and post-confirmation taxes, of \$\_\_\_\_\_\_\_. The final
Plan payment is expected to be paid on \_\_\_\_\_\_\_\_\_.

\[Summarize the numerical projections, and highlight any assumptions
that are not in accord with past experience. Explain why such
assumptions should now be made.\]

You should consult with your accountant or other financial advisor if
you have any questions pertaining to these projections.

**[X. EFFECT OF CONFIRMATION OF PLAN]{.smallcaps}**

**A. Discharge**

\[If the Debtor is not entitled to discharge under 11\| U.S.C. §
1141(d)(3) change this heading to "NO DISCHARGE OF DEBTOR."\]

\[Option l - If Debtor is an individual and § 1141(d)(3) is not
applicable\]

Confirmation of this Plan does not discharge any debt provided for in
this Plan until the court grants a discharge on completion of all
payments under this Plan, or as otherwise provided in Code § 1141(d)(5).
The Debtor will not be discharged from any debt excepted from discharge
under Code § 523, except as provided in Rule 4007(c) of the Federal
Rules of Bankruptcy Procedure.

\[Option 2---If the Debtor is a partnership and Code § 1141(d)(3) is not
applicable\]

On the confirmation date of this Plan, the debtor will be discharged
from any debt that arose before confirmation of this Plan, subject to
the occurrence of the effective date, to the extent specified in Code §
1141(d)(1)(A). The Debtor will not be discharged from any debt imposed
by this Plan.

\[Option 3---If the Debtor is a corporation and Code § 1141(d)(3) is not
applicable\]

On the confirmation date of this Plan, the debtor will be discharged
from any debt that arose before confirmation of this Plan, subject to
the occurrence of the effective date, to the extent specified in Code §
1141(d)(1)(A), except that the Debtor will not be discharged of any
debt: (i) imposed by this Plan; (ii) of a kind specified in Code §
1141(d)(6)(A) if a timely complaint was filed in accordance with Rule
4007(c) of the Federal Rules of Bankruptcy Procedure; or (iii) of a kind
specified in Code § 1141(d)(b)(8).

\[Option 4 --- If § 1141(d)(3) is applicable\]

In accordance with Code § 1141(d)(3), the Debtor will not receive any
discharge of debt in this bankruptcy case.

**B. Modification of Plan**

The Plan Proponent may modify the Plan at any time before confirmation
of the Plan. However, the Court may require a new disclosure statement
and/or revoting on the Plan.

\[If the Debtor is not an individual, add the following: \"The Plan
Proponent may also seek to modify the Plan at any time after
confirmation only if (1) the Plan has not been substantially consummated
and (2) the Court authorizes the proposed modifications after notice and
a hearing.\"\]

\[If the Debtor is an individual, add the following: \"Upon request of
the Debtor, the United States trustee, or the holder of an allowed
unsecured claim, the Plan may be modified at any time after confirmation
of the Plan but before the completion of payments under the Plan, to (1)
increase or reduce the amount of payments under the Plan on claims of a
particular class, (2) extend or reduce the time period for such
payments, or (3) alter the amount of distribution to a creditor whose
claim is provided for by the Plan to the extent necessary to take
account of any payment of the claim made other than under the Plan.\"\]

**C. Final Decree**

Once the estate has been fully administered, as provided in Rule 3022 of
the Federal Rules of Bankruptcy Procedure, the Plan Proponent, or such
other party as the Court shall designate in the Plan Confirmation Order,
shall file a motion with the Court to obtain a final decree to close the
case. Alternatively, the Court may enter such a final decree on its own
motion.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Signature of the Plan Proponent\]

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\[Signature of the Attorney for the Plan Proponent\]

Instructions: Complete all parts of the form, include Exhibits A-G on
the following pages, and file with the Court

ECF Event: Bankruptcy\>Plan\>Chapter 11 Small Business Plan & Disclosure
Statement

EXHIBITS

Exhibit A -- Identity and Value of Material Assets of Debtor

Exhibit B -- Prepetition Financial Statements(to be taken from those
filed with the court)

Exhibit C -- Cure Proposals for Executory Contracts and Unexpired Leases
to be Assumed

Exhibit D -- Summary of Postpetition Operating Reports

Exhibit E --- Liquidation Analysis

Plan Proponent\'s Estimated Liquidation Value of Assets

Assets

a\. Cash on hand \$

b\. Accounts receivable \$

c\. Inventory \$

d\. Office furniture & equipment \$

e\. Machinery & equipment \$

f\. Automobiles \$

g\. Building & Land \$

h\. Customer list \$

I Investment property (such as stocks, bonds or other \$

> financial assets)

j\. Lawsuits or other claims against third-parties \$

k\. Other intangibles (such as avoiding powers actions) \$

> Total Assets at Liquidation Value \$

Less:

Secured creditors\' recoveries \$

Less:

Chapter 7 trustee fees and expenses \$

Less:

Chapter 11 administrative expenses \$

Less:

Priority claims, excluding administrative expense claims \$

\[Less:

Debtor\'s claimed exemptions\] \$

\(1\) Balance for unsecured claims

\(2\) Total dollar amount of unsecured claims

Percentage of Claims Which Unsecured Creditors Would \$

Receive Or Retain in a Chapter 7 Liquidation:

Percentage of Claims Which Unsecured Creditors Will \_\_\_% \[Divide (1)
by (2)\] Receive or Retain under the Plan:

> \_\_\_%

Exhibit F --- Cash on hand on the effective date of the Plan

Cash on hand on effective date of the Plan: \$

Less -

> Amount of administrative expenses payable on -
>
> effective date of the Plan
>
> Amount of statutory costs and charges -
>
> Amount of cure payments for executory contracts -
>
> Other PlanPayments due on effective date of the -
>
> Plan
>
> Balance after paying these amounts ......... \$

The sources of the cash Debtor will have on hand by the effective date
of the Planare estimated as follows:

\$ Cash in Debtor\'s bank account now

> \+ Additional cash Debtor will accumulate from net earnings between
> now and effective date of the Plan\[state the basis for such
> projections\]
>
> \+ Borrowing \[separately state terms of repayment\]
>
> \+ Capital Contributions
>
> \+ Other
>
> \$ Total \[This number should match "cash on hand" figure noted above

Exhibit G -- Projections of Cash Flow and Earnings for Post-Confirmation
Period