Chapter 11 Bankruptcy

Chapter 11 Bankruptcy

Chapter 11 Bankruptcy – Business Reorganization

Chapter 11 is generally used by sinking businesses that believe they have a shot at staying open if only they had time to reorganize and legally shed some debt. A Chapter 11 is also commenced by filing a petition with the bankruptcy court and the debtor must disclose in detail its financial status and propose a feasible plan of reorganization.

The plan of reorganization will list creditors’ claims in various classes and propose how each class will be treated. Unsecured claims, for example, may receive only a small percentage of each claim, while key secured creditors may receive 100%. If a plan is “confirmed” by the court, the plan thereafter governs the relation between the debtor and its creditors. If the debtor is unable to propose a confirmable plan, creditors may propose their own plan, or the case may be converted to a Chapter 7 liquidation.

Related Services: Chapter 7 Bankruptcy; Chapter 12 Bankruptcy; Chapter 13 Bankruptcy; Michigan Bankruptcy Laws; Bankruptcy

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