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7.6 SEC reporting considerations
Publication date: 31 Jul 2023
us Bankruptcy & liquidation guide
A reporting entity that is an SEC registrant should consider the following unique reporting considerations with respect to bankruptcy filings and plan confirmations:
- Notification of a bankruptcy filing
- Confirmation of a plan
- Pro forma financial information
7.6.1 Notification of a bankruptcy filing
When a reporting entity initiates a proceeding under the Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of a registrant or its parent, the reporting entity is required to file a Form 8-K under Item 1.03 within four business days. The Form 8-K should include:
- The name or other identification of the proceeding
- The identity of the court or governmental authority
- The date that the jurisdiction was assumed
- The identity of the receiver, fiscal agent or similar, and the date of their appointment
7.6.2 Confirmation of a plan
If an order confirming a plan of reorganization, arrangement, or liquidation has been entered by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the registrant or its parent, the registrant is also required to file a Form 8-K under Item 1.03 within four business days of confirmation. The Form 8-K should include:
- The identity of the court or governmental authority
- The date that the order confirming the plan was entered into by the court or governmental authority
- A summary of the material features of the plan and, pursuant to Item 9.01, a copy of the confirmed plan
- The number of issued and outstanding shares or other units of the registrant or its parent, the number reserved for future issuance in respect of claims and interests filed and allowed under the plan of reorganization, and the aggregate total of such numbers
- Information as to the assets and liabilities of the registrant or its parent as of the date that the order confirming the plan was entered, or a date as close to it as practicable, which may be presented in the form in which it was furnished to the court or governmental authority
7.6.3 Pro forma financial information
As discussed in BLG 4.5.7, entities emerging from bankruptcy after period end may present a pro forma balance sheet in the footnotes reflecting the application of fresh-start reporting on period-end balances, presented in a 4-column format.
In connection with the emergence from bankruptcy or subsequent to emergence, a registrant may also be required to prepare pro forma financial information in accordance with Regulation S-X, Article 11 to be included in a registration statement, proxy statement, Form 8-K, or other SEC document.
In addition to any pro forma adjustments related to the transaction for which pro forma financial statements are required, the registrant should reflect pro forma adjustments to give effect to the plan of reorganization and the adoption of fresh-start accounting based on the guidance in Regulation S-X, Rule 11-02(c) as follows.
- The pro forma condensed balance sheet should reflect the adoption of fresh-start accounting as if it was adopted as of the end of the most recent period for which a consolidated balance sheet is presented, unless fresh-start accounting is already reflected in such balance sheet.
- The pro forma condensed income statements for the most recently completed fiscal year and the subsequent interim period up to the most recent date for which a consolidated balance sheet is presented should reflect the adoption of fresh-start accounting as if it was adopted as of the beginning of the most recently completed fiscal year.
All other pro forma financial statement requirements, including an introductory paragraph and explanatory footnotes, should be followed in accordance with Regulation S-X, Rule 11-02.
PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
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