After the submission of a reorganization plan, the bankruptcy court conducts a hearing for confirmation. In certain cases, there may be some alteration or modification due to the interference of the interested parties. If there is no alteration or modification in the reorganization plan, the bankruptcy court initiates steps for the affirmation of the plan. After completion of all post-confirmation proceedings of the plan, the bankruptcy court sets time limits for filing a final report and motion for a final decree. The Bankruptcy Code requires the court to close a bankruptcy case immediately after full administration of the real property and the discharge of the US Trustee. In short, the entry of a final decree is meant to close a bankruptcy case.
Chapter 11, Rule 3022 of the Bankruptcy Code provides that immediately after the full administration of the real property, the debtor-in-possession of the property must file a final report and motion for final decree. The motion for final decree should be submitted in substantial confirmation with the business debtor or individual debtor of the bankruptcy case. The final report and motion for final decree must be filed along with a proposed order confirmed by the business or individual debtor. The notice of the motion for final decree should be communicated to the US bankruptcy trustee and other parties.
If there is any objection regarding the final report in a bankruptcy case, the time period to submit an objection is limited to 30 days. After the expiry of the 30 days time period for objection, the bankruptcy court can construe that the real property has been fully and properly administered. There are certain factors that influence a bankruptcy court in determining the full administration of real property. The factors are:
- If confirmation order for reorganization plan become final;
- If any distribution of deposits required in the reorganization plan has been satisfied;
- If any transfer of proposed real property in the reorganization plan has been transferred;
- If the debtor in the reorganization plan has assumed the business or management of the property in accordance to the plan;
- If the repayments to the creditors has been initiated in accordance with the reorganization plan schedule; and
- If there is any motion, contested matters, or advisory proceedings pending for disposal.
In certain situations, the application for a final decree can be initiated either by the US Trustee or creditors’ committee, or any other interested group of creditors. Normally, there is no hearing in these situations. However, the court may conduct a hearing if there is any request for it from any interested party.
Generally, the relief in the motion for final decree is granted in the best interests of the business or individual debtor, the real property, creditors and all other interested parties of the bankruptcy case.