The acceptance of a plan of reorganization under the Bankruptcy Code by the United States Attorney amounts to the compromise of a claim by the United States. The same limitations and standards as described in JM 4-3.200 ggovern compromises under the Bankruptcy Code. For purposes of determining the United States Attorneys' authority to accept a plan, the term gross amount of the original claim as used in Civil Division Directive No. 1-15, means liquidation value. Liquidation value is the forced sale value of the collateral, if any, securing the claims plus the dividend likely to be paid for the unsecured portion of the claims in an actual or hypothetical liquidation of the bankruptcy estate. If the debtor fails to provide the information needed to consider the plan, or if inadequate time is allowed to obtain any required Department of Justice approvals for the compromise, the United States Attorney should file an objection to confirmation of the plan with the bankruptcy court.

[updated April 2018]