Reorganization Plan

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Reorganization Plan

A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions.

A reorganization plan must specify the reorganizations that the president deems to be necessary after making an investigation. A plan may provide for

  1. the transfer of the whole or a part of an agency, or of the whole or a part of the functions thereof, to the jurisdiction and control of another agency;
  2. the abolition of all or a part of the functions of an agency, except that no enforcement function or statutory program shall be abolished by the plan;
  3. the consolidation or coordination of the whole or a part of an agency, or of the whole or a part of the functions thereof, with the whole or a part of another agency or the functions thereof;
  4. the consolidation or coordination of a part of an agency or the functions thereof with another part of the same agency or the functions thereof;
  5. the authorization of an officer to delegate any of his or her functions; or
  6. the abolition of the whole or a part of an agency that does not have, or on the taking effect of the reorganization plan will not have, any functions.

No more than three plans may be pending before Congress at one time. In the message conveying a reorganization plan, the president must specify, with respect to each abolition of a function encompassed in the plan, the statutory authority for the exercise of the function. The message must also estimate any reduction or increase in expenditures, itemized whenever practicable, and describe in detail any improvements in management, delivery of federal services, execution of the laws, and increases in efficiency of government operations that, it is expected, will ensue from the reorganization plan.

The president can withdraw the plan at any time prior to the conclusion of 60 calendar days of a continuous session of Congress, following the date on which the plan is submitted to Congress.

Additional contents of a reorganization plan are permitted by federal law. A reorganization plan submitted by the president

  1. may change, in such cases as the president considers necessary, the name of an agency affected by a reorganization and the title of its head and shall designate the name of an agency resulting from a reorganization and the title of its head;
  2. may provide for the appointment and pay of the head and one or more officers of any agency (including an agency resulting from a consolidation or other type of reorganization), if the president finds and, in the message transmitting the plan, declares that by reason of a reorganization made by the plan, the provisions are necessary;
  3. shall provide for the transfer or other disposition of the records, property, and personnel affected by a reorganization;
  4. shall provide for the transfer of such unexpended balances of appropriations, and of other funds, available for use in connection with a function or agency affected by a reorganization, as the president considers necessary by reason of the reorganization for use in connection with the functions affected by the reorganization, or for the use of the agency that shall have the functions after the reorganization plan is effective; and
  5. shall provide for terminating the affairs of an abolished agency.

A reorganization plan can neither provide for nor have the effect of

  1. creating a new executive department, abolishing or transferring an executive department or independent regulatory agency, or all the functions thereof, or consolidating two or more executive departments or two or more independent regulatory agencies, or all the functions thereof;
  2. continuing an agency beyond the period authorized by law for its existence or beyond the time when it would have terminated if the reorganization had not been made;
  3. continuing a function beyond the period authorized by law for its exercise or beyond the time when it would have terminated if the reorganization had not been made;
  • authorizing an agency to exercise a function that is not expressly authorized by law at the time the plan is transmitted to Congress;
  • increasing the term of an office beyond that provided by law for the office; or
  • dealing with more than one logically consistent subject matter.

A reorganization plan ordinarily is effective at the conclusion of the first period of 60 calendar days of continuous session of Congress after the date on which the plan is transmitted to it, unless, between the transmittal date and the end of the 60-day period, either house passes a resonlution declaring that the house does not favor the reorganization plan. A reorganization plan can prescribe that its provisions will be effective at a time later than the date on which the plan otherwise would be effective. In addition, if both houses of Congress have defeated a resolution of disapproval, the provisions can be effective at a time earlier than the expiration of the 60-day period.

An effective reorganization plan is published in the statutes at large, in the same volume as the public laws, and in the Federal Register.

If a statute is enacted, an action taken, a regulation promulgated by an agency, or a function affected by a reorganization before the effective date of the reorganization, it has, except to the extent rescinded, modified, superseded, or made inapplicable by or under authority of law, or by the abolition of a function, the same effect as if the reorganization had not been made. If, however, the statute, regulation, or other action has vested the functions in the agency from which it is removed under the reorganization plan, the function, insofar as it is to be exercised after the plan becomes effective, is regarded as vested in the agency under which the function is placed by the plan.

A suit, action, or other proceeding lawfully instituted by or against the head of an agency or other officer of the United States, in his official capacity, or in relation to the performance of his official duties, does not abate because a reorganization plan becomes effective. If a motion, an application for a court order, or a supplemental petition showing a necessity for a survival of the suit, action, or proceeding is filed at any time within 12 months after the reorganization plan takes effect, the court may allow the suit, action, or proceeding to be maintained by or against the successor of the head or officer under the reorganization achieved by the plan or, if there is no successor, against such agency or officer as the president designates.

The appropriations or portions thereof unexpended because of the operation of the reorganization plan revert to the Treasury Department.

Further readings

Gilmour, Robert S., and Alexis A. Halley. 1994. Who Makes Public Policy?: The Struggle Between Congress and the Executive. New York: Seven Bridges.

Cross-references

Administrative Agency; Administrative Law and Procedure; Executive Branch.

References in periodicals archive ?
Under the plan of reorganization, the company's existing bank debt is to be canceled as of the effective date in favor of a new credit facility, Conseco said.
Although the amount and type of consideration -- which could take the form of stock, cash or both -- that will be received by the Trust is unknown at this time, the AICPA Life Insurance/Disability Plans Committee and its Task Force for Demutualization are continuing to monitor the demutualization process and are currently in the process of reviewing Prudential's Plan of Reorganization.
While the filing of a consensual plan of reorganization is the company's preferred outcome, the company believes that it is taking prudent steps in the event a consensual plan of reorganization with Ventas cannot be reached.
Commenting on the plan, Doug Steenland, Northwest Airlines president and chief executive officer, said, "The filing of our plan of reorganization is a key milestone in our ongoing restructuring efforts and begins Northwest's emergence from Chapter 11 protection.
In 1989 the Bankruptcy Court approved a Plan of Reorganization and entered an injunction prohibiting the filing of asbestos and certain other claims against the reorganized company.
We are independently evaluating these developments and are working with the Creditors' Committee to determine what effect this will have on the Plan of Reorganization and the confirmation process.
Phar-Mor said it is seeking to extend the exclusivity period to give the company more time to negotiate with its creditors and work toward a consensual plan of reorganization.
The agreement, reached with the assistance of a court-appointed mediator, provides that all present and future asbestos-related personal injury claims will be channeled to and resolved by a claims administration trust that will receive cash, debt securities and substantially all of the common stock of the reorganized Company under a plan of reorganization (the "Plan").
if the Plan of Reorganization is confirmed by the Bankruptcy Court, to distribute the Twenty Three Million Two Hundred Eight Thousand Three Hundred Eight One (23,280,381) common shares as a dividend to American Capital Holdings, Inc.
Miller, chairman, president and chief executive officer, stated, "The company has worked very hard to put a Plan of Reorganization together that will permit the company to emerge from bankruptcy as a financially stable air carrier and I believe that this plan will permit the company to achieve that goal.
Factors that could cause actual results to differ from expectations include: (i) the future cost and timing of estimated asbestos liabilities and payments, (ii) the availability of insurance coverage and reimbursement from insurance companies that underwrote the applicable insurance policies for the Company for asbestos-related claims, (iii) the costs relating to the execution and implementation of any plan of reorganization pursued by Congoleum, (iv) timely reaching agreement with other creditors, or classes of creditors, that exist or may emerge, (v) satisfaction of the conditions and obligations under Congoleum's outstanding debt instruments, (vi) the response from time to time of Congoleum's and its controlling shareholder's, American Biltrite Inc.
In addition, in order to protect against loss or limitation of Transcisco's net operating loss carry forward under Section 382 of the Internal Revenue Code, and to assure continued compliance with the Joint Plan of Reorganization, the Amended and Restated Certificate of Incorporation provides that no person may become the beneficial owner of any shares of the company's Common Stock if following such acquisition such person would be the beneficial owner of 5 percent or more of the outstanding Common Stock, unless prior to such acquisition Transcisco's board of directors approves such acquisition.