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Equity Security Holders

An equity security holder is a holder of an equity security of the debtor in a bankruptcy case. Examples of an equity security are a share in a corporation; an interest of a limited partner in a limited partnership; or a right to purchase, sell, or subscribe to a share, security, or interest of a share in a corporation or an interest in a limited partnership.

An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor’s schedules, unless it is scheduled as disputed, contingent, or unliquidated. An equity security holder whose interest is not scheduled or is scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. A properly filed proof of interest supersedes any scheduling of that interest.

In a Chapter 11 reorganization case, unless otherwise ordered by the court, the clerk or some other person as the court may direct must give notice to all equity security holders of (1) the order for relief, (2) any meeting of equity security holders held pursuant to the Bankruptcy Code, (3) the hearing on the proposed sale of all or substantially all of the debtor’s assets, (4) the hearing on the dismissal or conversion of a case to another chapter, (5) the time fixed for filing objections to and the hearing to consider approval of a disclosure statement, (6) the time fixed for filing objections to and the hearing to consider confirmation of a plan and (7) the time fixed to accept or reject a proposed modification of a plan.


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