Chapter 11 bankruptcy is referred to as “business reorganization” bankruptcy. It is specifically aimed at relieving the debts of businesses and corporations. Businesses that file for Chapter 11 are able to continue with almost normal operation as a debtor-in-possession. It is designed to permit a business the ability both to restructure its debt and to reorganize its business operations
The Reorganization Plan
Filing for Chapter 11 bankruptcy can only be successful if you receive the consent of your business’s creditors. The creditors’ committee is presented with a debt repayment plan that typically explains how they will benefit. Creditors will only accept the plan if they believe they will receive more funds under the plan than from liquidation.