|
Chapter 11 is a reorganization proceeding, typically for corporations or
partnerships. Individuals, especially those whose debts exceed the limits of
Chapter 13, may file Chapter 11. In Chapter 11, the debtor usually remains in
possession of his assets and continues to operate any business, subject to the
oversight of the court and the creditors committee. The debtor proposes a plan
of reorganization which, upon acceptance by a majority of the creditors, is
confirmed by the court and binds both the debtor and the creditors to its terms
of repayment. Plans can call for repayment out of future profits, sales of some
or all of the assets, or a merger or recapitalization. Chapter 11 bankruptcies
are frequently converted to Chapter 7 when it becomes apparent that the
restructuring of the business is not working. |
