**B25B (Official Form 25B) (12/08)**

United States Bankruptcy Court

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ District of
\_\_\_\_\_\_\_\_\_\_\_\_\_

In re[ ,]{.underline} Case No. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Debtor

Small Business Case under Chapter 11

**[\[NAME OF PLAN PROPONENT\]]{.underline}[']{.underline}[S
]{.underline}[DISCLOSURE STATEMENT]{.underline}[,]{.underline} DATED
\[INSERT DATE\]**

***Table of Contents***

\[Insert when text is finalized\]

I. **INTRODUCTION**

This is the disclosure statement (the "Disclosure Statement") in the
small business chapter 11 case of \_\_\_\_\_\_\_\_\_\_\_\_\_ (the
Debtor). This Disclosure Statement contains information about the Debtor
and describes the \[insert name of plan\] (the "Plan") filed by \[the
Debtor\] on \[insert date\]. A full copy of the Plan is attached to this
Disclosure Statement as Exhibit A. ***Your rights may be affected. You
should read the Plan and this Disclosure Statement carefully and discuss
them with your attorney. If you do not have an attorney, you may wish to
consult one.***

The proposed distributions under the Plan are discussed at pages
\_\_-\_\_ of this Disclosure Statement. \[General unsecured creditors
are classified in Class \_\_, and will receive a distribution of \_\_\_
% of their allowed claims, to be distributed as follows
\_\_\_\_\_\_\_\_\_.\]

A. **Purpose of This Document**

This Disclosure Statement describes:

The Debtor and significant events during the bankruptcy case,

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,
and

● The effect of confirmation of the Plan.

Be sure to read the Plan as well as the Disclosure Statement. This
Disclosure Statement describes the Plan, but it is the Plan itself that
will, if confirmed, establish your rights.

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

The Court has not yet confirmed the Plan described in this Disclosure
Statement. This section describes the procedures pursuant to which the
Plan will or will not be confirmed.

1\. *Time and Place of the Hearing to \[Finally Approve This Disclosure
Statement and\] Confirm the Plan*

The hearing at which the Court will determine whether to \[finally
approve this Disclosure Statement and\] confirm the Plan will take place
on [ \[insert date\] ]{.underline}, at \[insert time\], in Courtroom [
\_\_\_]{.underline}, 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 IV.A. 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 \[this Disclosure Statement or to\] the 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
\[insert name and address of representative of plan proponent\].

C. **Disclaimer**

***The Court has **\[conditionally\] **approved this Disclosure
Statement as containing **adequate **information to enable parties
affected by the Plan to make an informed judgment about its terms.** The
Court has not yet determined whether the Plan meets the legal
requirements for confirmation, and the fact that the Court has approved
this Disclosure Statement does not constitute an endorsement of the Plan
by the Court, or a recommendation that it be accepted. ** \[**The
**C**ourt**s approval of this Disclosure Statement** is** subject to
final approval at the hearing on confirmation of the Plan. Objections to
the adequacy of this **D**isclosure **S**tatement may be filed until
\_\_\_\_\_\_.\] ***

II\. **BACKGROUND**

A. **Description and History of the Debtors 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 **

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

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

During the two years prior to the date on which the 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: \[List Managers of the Debtor during the Debtor's chapter 11
case.\]

After the effective date of the order confirming the Plan, the
directors, officers, and voting trustees of the Debtor, any affiliate of
the Debtor participating in a joint Plan with the Debtor, or successor
of the Debtor under the Plan (collectively the "Post Confirmation
Managers"), will be: \[List Post Confirmation Managers of the Debtor.\]
The responsibilities and compensation of these Post Confirmation
Managers are described in section \_\_ of this Disclosure Statement.

D. **Events Leading to 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.

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-   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.

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-   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 set forth in
Article V of the Plan.

H. **Current and Historical Financial Conditions**

The identity and fair market value of the estates assets are listed in
Exhibit B. \[Identify source and basis of valuation.\]

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

\[The most recent post-petition operating report filed since the
commencement of the Debtor's bankruptcy case are set forth in Exhibit
D.\] \[A summary of the Debtor's periodic operating reports filed since
the commencement of the Debtor's bankruptcy case is set forth in Exhibit
D.\]

III\. **SUMMARY OF THE PLAN OF REORGANIZATION AND TREATMENT OF CLAIMS
AND EQUITY INTERESTS**

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. **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. As such, the Plan Proponent has *not* placed the following
claims in any class:

1\. *Administrative Expenses*

Administrative expenses are costs or expenses of administering the
Debtors chapter 11 case which are allowed under § 507(a)(2) of the Code.
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 all
administrative expenses be paid on the effective date of the Plan,
unless a particular claimant agrees to a different treatment.

The following chart lists the Debtors estimated administrative expenses,
and their proposed treatment under the Plan:

  -------------------------------------------------------------------------------------------------------- ----------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  **[Type]{.underline}**                                                                                   **[Estimated Amount Owed]{.underline}**   **[Proposed Treatment]{.underline}**
                                                                                                                                                     
  Expenses Arising in the Ordinary Course of Business After the Petition Date                                                                        Paid in full on the effective date of the Plan, or according to terms of obligation if later
  The Value of Goods Received in the Ordinary Course of Business Within 20 Days Before the Petition Date                                             Paid in full on the effective date of the Plan, or according to terms of obligation if later
  Professional Fees, as approved by the Court.                                                                                                       Paid in full on the 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
  Clerks Office Fees                                                                                                                                 Paid in full on the effective date of the Plan
  Other administrative expenses                                                                                                                      Paid in full on the effective date of the Plan or according to separate written agreement
  Office of the U.S. Trustee Fees                                                                                                                    Paid in full on the effective date of the Plan
                                                                                                                                                     
  TOTAL                                                                                                                                              
                                                                                                                                                     
  -------------------------------------------------------------------------------------------------------- ----------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2\. *Priority Tax Claims*

Priority tax claims are unsecured income, employment, and other taxes
described by

§ 507(a)(8) of the Code. 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 Debtors estimated § 507(a)(8) priority tax
claims and their proposed treatment under the Plan:

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

C. **Classes of Claims and Equity Interests **

The following are the classes set forth in the Plan, and the proposed
treatment that they will receive under the Plan:

1\. *Classes of Secured Claims*

Allowed Secured Claims are claims secured by property of the Debtors
bankruptcy estate (or that are subject to setoff) to the extent allowed
as secured claims under § 506 of the Code. 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 \[be
classified as a general unsecured claim\].

The following chart lists all classes containing Debtors secured
prepetition claims and their proposed treatment under the Plan:

+-----------+-----------+-----------+-----------+-----------+---+
| **[Class  | **        | **I       | **Imp     | **Tr      |   |
| \#]{.und  | [Descript | nsider?** | airment** | eatment** |   |
| erline}** | ion]{.und |           |           |           |   |
|           | erline}** | **(Yes or |           |           |   |
|           |           | No)**     |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+
|           |           |           |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+
|           | *Secured  |           | \[State   | \[        | = |
|           | claim     |           | whether   | Monthly\] |   |
|           | of*:      |           | impaired  | Pmt       | = |
|           |           |           | or        |           |   |
|           | Name =    |           | uni       | Pmts      | = |
|           |           |           | mpaired\] | Begin     |   |
|           | C         |           |           |           | = |
|           | ollateral |           |           | Pmts End  |   |
|           | de        |           |           |           | = |
|           | scription |           |           | \[Balloon |   |
|           | =         |           |           | pmt\]     | = |
|           |           |           |           |           |   |
|           | Allowed   |           |           | Interest  | = |
|           | Secured   |           |           | rate %    |   |
|           | Amount =  |           |           |           |   |
|           |           |           |           | Treatment |   |
|           | \$\_\_    |           |           | of Lien   |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           | \[A       |   |
|           |           |           |           | dditional |   |
|           | Priority  |           |           | payment   |   |
|           | of lien = |           |           | required  |   |
|           |           |           |           | to cure   |   |
|           | Principal |           |           | d         |   |
|           | owed =    |           |           | efaults\] |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
|           |           |           |           |           |   |
|           | Pre-pet.  |           |           |           |   |
|           | arrearage |           |           |           |   |
|           | =         |           |           |           |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
|           |           |           |           |           |   |
|           | Total     |           |           |           |   |
|           | claim =   |           |           |           |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+
|           |           |           |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+
|           | *Secured  |           | \[State   | Monthly   | = |
|           | claim     |           | whether   | Pmt       |   |
|           | of*:      |           | impaired  |           | = |
|           |           |           | or        | Pmts      |   |
|           | Name =    |           | uni       | Begin     | = |
|           |           |           | mpaired\] |           |   |
|           | C         |           |           | Pmts End  | = |
|           | ollateral |           |           |           |   |
|           | de        |           |           | \[Balloon | = |
|           | scription |           |           | pmt\]     |   |
|           | =         |           |           |           | = |
|           |           |           |           | Interest  |   |
|           | Allowed   |           |           | rate %    | = |
|           | Secured   |           |           |           |   |
|           | Amount =  |           |           | Treatment |   |
|           |           |           |           | of Lien   |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           | \[A       |   |
|           | _\_\_\_\_ |           |           | dditional |   |
|           |           |           |           | payment   |   |
|           | Priority  |           |           | required  |   |
|           | of lien = |           |           | to cure   |   |
|           |           |           |           | d         |   |
|           | Principal |           |           | efaults\] |   |
|           | owed =    |           |           |           |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
|           |           |           |           |           |   |
|           | Pre-pet.  |           |           |           |   |
|           | arrearage |           |           |           |   |
|           | =         |           |           |           |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
|           |           |           |           |           |   |
|           | Total     |           |           |           |   |
|           | claim =   |           |           |           |   |
|           |           |           |           |           |   |
|           | \$\_\_    |           |           |           |   |
|           | \_\_\_\_\ |           |           |           |   |
|           | _\_\_\_\_ |           |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+
|           |           |           |           |           |   |
+-----------+-----------+-----------+-----------+-----------+---+

2\. *Classes of Priority Unsecured Claims*

Certain priority claims that are referred to in §§ 507(a)(1), (4), (5),
(6), and (7) of the Code 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.

The following chart lists all classes containing claims under §§
507(a)(1), (4), (5), (6), and (a)(7) of the Code and their proposed
treatment under the Plan:

+--------------+-----------------+-----------------+---------------+
| **Class **\# | **Description** | **Impairment**  | **Treatment** |
+--------------+-----------------+-----------------+---------------+
|              |                 |                 |               |
+--------------+-----------------+-----------------+---------------+
|              | Priority        | \[State whether |               |
|              | unsecured claim | impaired or     |               |
|              | pursuant to     | unimpaired\]    |               |
|              | Section         |                 |               |
|              | \[insert\]      |                 |               |
|              |                 |                 |               |
|              | Total amt of    |                 |               |
|              | claims =        |                 |               |
|              |                 |                 |               |
|              | \$              |                 |               |
+--------------+-----------------+-----------------+---------------+
|              | Priority        | \[State whether |               |
|              | unsecured claim | impaired or     |               |
|              | pursuant to     | unimpaired\]    |               |
|              | Section         |                 |               |
|              | \[insert\]      |                 |               |
|              |                 |                 |               |
|              | Total amt of    |                 |               |
|              | claims =        |                 |               |
|              |                 |                 |               |
|              | \$              |                 |               |
+--------------+-----------------+-----------------+---------------+
|              |                 |                 |               |
+--------------+-----------------+-----------------+---------------+

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 § 507(a) of the Code. \[Insert
description of §1122(b) convenience class if applicable.\]

The following chart identifies the Plans proposed treatment of
Class\[es\] \_\_ through \_\_, which contain general unsecured claims
against the Debtor:

+--------------+---------------+---------------+---------------+---+
| **Class \#** | **            | *             | **Treatment** |   |
|              | Description** | *Impairment** |               |   |
+--------------+---------------+---------------+---------------+---+
|              |               |               |               |   |
+--------------+---------------+---------------+---------------+---+
|              | \[1122(b)     | \[State       | \[Insert      |   |
|              | Convenience   | whether       | proposed      |   |
|              | Class\]       | impaired or   | treatment,    |   |
|              |               | unimpaired\]  | such as "Paid |   |
|              |               |               | in full in    |   |
|              |               |               | cash on       |   |
|              |               |               | effective     |   |
|              |               |               | date of the   |   |
|              |               |               | Plan or when  |   |
|              |               |               | due under     |   |
|              |               |               | contract or   |   |
|              |               |               | applicable    |   |
|              |               |               | nonbankruptcy |   |
|              |               |               | law"\]        |   |
+--------------+---------------+---------------+---------------+---+
|              |               |               |               |   |
+--------------+---------------+---------------+---------------+---+
|              | General       | \[State       | Monthly Pmt   | = |
|              | Unsecured     | whether       | Pmts Begin    |   |
|              | Class         | impaired or   |               | = |
|              |               | unimpaired\]  | Pmts End      |   |
|              |               |               |               | = |
|              |               |               | \[Balloon     |   |
|              |               |               | pmt\]         | = |
|              |               |               |               |   |
|              |               |               | Interest rate | = |
|              |               |               | % from        |   |
|              |               |               | \[date\]      | = |
|              |               |               |               |   |
|              |               |               | Estimated     |   |
|              |               |               | percent of    |   |
|              |               |               | claim paid    |   |
+--------------+---------------+---------------+---------------+---+
|              |               |               |               |   |
+--------------+---------------+---------------+---------------+---+

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.

The following chart sets forth the Plans proposed treatment of the
class\[es\] of equity interest holders: \[There may be more than one
class of equity interests in, for example, a partnership case, or a case
where the prepetition debtor had issued multiple classes of stock.\]

  -------------- ------------------------- ------------------------------------------ ---------------
  **Class \#**   **Description**           **Impairment**                             **Treatment**
                                                                                      
                 Equity interest holders   \[State whether impaired or unimpaired\]   
                                                                                      
  -------------- ------------------------- ------------------------------------------ ---------------

D. **Means of Implementing the Plan**

1\. *Source of Payments*

Payments and distributions under the Plan will be funded by the
following:

\[Describe the source of funds for payments under the Plan.\]

2\. *Post-confirmation Management*

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

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

E. **Risk Factors**

The proposed Plan has the following risks:

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

F. **Executory Contracts and Unexpired Leases**

The Plan, in Exhibit 5.1, lists all executory contracts and unexpired
leases that the Debtor will assume under the Plan. Assumption means that
the Debtor has elected to continue to perform the obligations under such
contracts and unexpired leases, and to cure defaults of the type that
must be cured under the Code, if any. Exhibit 5.1 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.

All executory contracts and unexpired leases that are not listed in
Exhibit 5.1 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.

**\[*The Deadline for Filing a Proof of Claim Based on a Claim Arising
from the Rejection of a Lease or Contract Is **[ ]{.underline}**.*** Any
claim based on the rejection of a contract or lease will be barred if
the proof of claim is not timely filed, unless the Court orders
otherwise.\]

G. **Tax Consequences of Plan**

***Creditors and **Equity **Interest Holders Concerned with How the Plan
May Affect Their Tax Liability Should Consult with Their Own
Accountants, Attorneys, And/Or Advisors.**** *

The following are the anticipated tax consequences of the Plan: \[List
the following general consequences as a minimum: (1)Tax consequences to
the Debtor of the Plan; (2) General tax consequences on creditors of any
discharge, and the general tax consequences of receipt of plan
consideration after confirmation.\]

IV\. **CONFIRMATION REQUIREMENTS AND PROCEDURES**

To be confirmable, the Plan must meet the requirements listed in §§
1129(a) or (b) of the Code. 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]{.underline} the only requirements listed in §
1129, and they are not the only requirements for confirmation.

A. **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.

In this case, the Plan Proponent believes that classes [ ]{.underline}**
**are impaired and that holders of claims in each of these classes are
therefore entitled to vote to accept or reject the Plan. The Plan
Proponent believes that classes [ ]{.underline}** **are unimpaired and
that holders of claims in each of these classes, therefore, do not have
the right to vote to accept or reject the Plan.

1\. *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 (1) the Debtor has
scheduled the claim on the Debtors 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, after
notice and hearing, either overrules the objection or allows the claim
or equity interest for voting purposes pursuant to Rule 3018(a) of the
Federal Rules of Bankruptcy Procedure.

***The deadline for filing a proof of claim in this case was **[
]{.underline}**.***

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

2\. *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 § 1124 of the Code, a class is considered impaired
if the Plan alters the legal, equitable, or contractual rights of the
members of that class.

3\. *Who is ****Not**** Entitled to Vote*

The holders of the following five types of claims and equity interests
are *not* entitled to vote:

-   holders of claims and equity interests that have been disallowed by
    an order of the Court;

-   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.

-   holders of claims or equity interests in unimpaired classes;

-   holders of claims entitled to priority pursuant to §§ 507(a)(2),
    (a)(3), and (a)(8) of the Code; and

-   holders of claims or equity interests in classes that do not receive
    or retain any value under the Plan;

-   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 \[and to the
Adequacy of the Disclosure Statement\]**.***

4\. *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.

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

If impaired classes exist, 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 later in Section \[B.2.\].

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 (1/2) 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 (2/3) 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 (2/3) 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 § 1129(b) of the Code. 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 § 1129(a)(8) of the Code, 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.***

C. **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.

D. **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.

1\. *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 this disclosure statement as
Exhibit F.

2\. *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 \$[
]{.underline}^[\ ]{.underline}^[ ]{.underline}. The final Plan payment
is expected to be paid on [ ]{.underline}.

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

***You Should Consult with Your Accountant or other Financial Advisor If
You Have Any Questions Pertaining to These Projections.***

V. **EFFECT OF CONFIRMATION OF PLAN**

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

**\[Option 1 -- If Debtor is an individual and § 1141(d)(3) is not
applicable\]**

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

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

[Discharge.]{.underline} On the effective date of the Plan, the Debtor
shall be discharged from any debt that arose before confirmation of the
Plan, subject to the occurrence of the effective date, to the extent
specified in § 1141(d)(1)(A) of the Code. However, the Debtor shall not
be discharged from any debt imposed by the Plan. After the effective
date of the Plan your claims against the Debtor will be limited to the
debts imposed by the Plan.

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

[Discharge.]{.underline} On the effective date of the Plan, the Debtor
shall be discharged from any debt that arose before confirmation of the
Plan, subject to the occurrence of the effective date, to the extent
specified in § 1141(d)(1)(A) of the Code, except that the Debtor shall
not be discharged of any debt (i) imposed by the Plan, (ii) of a kind
specified in § 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 § 1141(d)(6)(B). After the
effective date of the Plan your claims against the Debtor will be
limited to the debts described in clauses (i) through (iii) of the
preceding sentence.

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

[No Discharge.]{.underline} In accordance with § 1141(d)(3) of the Code,
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.

**VI. OTHER PLAN PROVISIONS**

\[Insert other provisions here, as necessary and appropriate.\]

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

\[Signature of the Plan Proponent\]

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

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

**EXHIBITS**

**Exhibit A** Copy of Proposed Plan of Reorganization

**Exhibit B** Identity and Value of Material Assets of Debtor

**Exhibit C ** Prepetition Financial Statements

(to be taken from those filed with the court)

**Exhibit D** \[Most Recently Filed Postpetition Operating
Report\]\[Summary of Postpetition Operating Reports\]

**Exhibit E -- **Liquidation Analysis

+-----------------------------------+---------------------------------+
| *** **Plan Proponent**'**s        | \$                              |
| Estimated Liquidation Value of    |                                 |
| Assets***                         | \$                              |
|                                   |                                 |
| **Assets**                        | \$[ ]{.underline}               |
|                                   |                                 |
| a\. Cash on hand                  | \$                              |
|                                   |                                 |
| b\. Accounts receivable           | \$                              |
|                                   |                                 |
| c\. Inventory                     | \$                              |
|                                   |                                 |
| d\. Office furniture & equipment  | \$                              |
|                                   |                                 |
| e\. Machinery & equipment         | \$[ ]{.underline}               |
|                                   |                                 |
| f\. Automobiles                   | \$                              |
|                                   |                                 |
| g\. Building & Land               | \$[ ]{.underline}               |
|                                   |                                 |
| h\. Customer list                 | **\$**                          |
|                                   |                                 |
| i\. Investment property (such as  | **\$**                          |
| stocks, bonds or other financial  |                                 |
| assets)                           | **\$[ ]{.underline}**           |
|                                   |                                 |
| 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:**                         |                                 |
|                                   | \_\_\_\_% \[Divide (1) by (2)\] |
| Chapter 7 trustee fees and        |                                 |
| expenses                          | \_\_\_\_%                       |
|                                   |                                 |
| **Less:**                         |                                 |
|                                   |                                 |
| Chapter 11 administrative         |                                 |
| expenses                          |                                 |
|                                   |                                 |
| **Less:**                         |                                 |
|                                   |                                 |
| Priority claims, excluding        |                                 |
| administrative expense claims     |                                 |
|                                   |                                 |
| **\[Less:**                       |                                 |
|                                   |                                 |
| Debtors claimed exemptions\]      |                                 |
|                                   |                                 |
| \(1\) 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 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           |                   |
|                                                 | \-[ ]{.underline} |
| Amount of cure payments for executory contracts |                   |
|                                                 | \$[ ]{.underline} |
| Other Plan Payments 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 Plan are estimated as follows:

+-------------------+-------------------------------------------------+
| \$                | Cash in Debtors 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                                           |
+-------------------+-------------------------------------------------+
| \$[ ]{.underline} | Total \[This number should match "cash on hand" |
|                   | figure noted above                              |
+-------------------+-------------------------------------------------+
|                   |                                                 |
+-------------------+-------------------------------------------------+

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