What is Chapter 11?
Chapter 11 is a chapter of the United State Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, or individual with unsecured debts of at least $336,900 or secured debts of at least $1,010,650.00. It is most prominently used by corporate entities.
Chapter 11 is a section of the Bankruptcy Code that enables businesses to reorganize while they stay in business. Sometimes Chapter 11 is also used by businesses who want to liquidate their assets but want to realize the most from the asset sale. Chapter 11 may also be used by individuals who exceed the debt limits imposed by the Bankruptcy Code for Chapter 13 reorganization.
Chapter 11 is a chapter the United States Bankruptcy Code. It controls the reorganization of a business that is no longer viable in terms of paying creditors with its current financial burden. The actual Bankruptcy Code of the United States is called Title 11 and has various chapters within it. For example, Chapter 7 deals with the process of liquidation bankruptcy. When a business finds that it is in trouble and no longer able to pay its creditors or maintain its debts, it can file with a bankruptcy court for protection under Chapter 11. A Chapter 11 filing means that the business intends to continue trading while the bankruptcy court supervises the company’s debt and contractual obligations. The court has the power to cancel all or some of the company’s debts. With this financial relief, the company has the chance to make a fresh start. Depending on the size of the company and the complexity of the bankruptcy, a company that files under Chapter 11 may become debt free within a few mo
LyondellBasell voluntarily filed to reorganize its U.S. operations and one of its European holding companies under Chapter 11 of the U.S. Bankruptcy Code on Jan. 6, 2009 in order to restructure the company’s debts. Additionally, LyondellBasell’s parent company and its general partner were voluntarily added to the Chapter 11 reorganization filing on April 24 to protect the holding companies against claims by certain financial and U.S. trade creditors. The United States Bankruptcy Court for the Southern District of New York is administering this restructuring and reorganization process. As part of the Chapter 11 process, LyondellBasell has obtained approximately $8 billion in debtor-in-possession (DIP) financing to fund continuing operations. The DIP financing includes two credit agreements: a $6.5 billion term loan (comprising $3.25 billion in new loans and a $3.25 billion roll-up of existing loans) and a $1.57* billion asset-backed lending facility (*increased by $30 million in March).
