What is a Chapter 11?
Although available to consumers, Chapter 11 bankruptcy is primarily designed to assist businesses facing financial stresses caused by a number of possible reasons, including lawsuits, hard economic times, or even management malfeasance. Generally, Chapter 11 bankruptcy allows a business to reorganize and avoid liquidation by providing Debtors the bargaining position they would not have otherwise to renegotiate debts to levels that can be sustained by the business during a Chapter 11 bankruptcy plan. If reorganization is not possible, Chapter 11 bankruptcy can provide for the liquidation of assets in an orderly fashion.
From Houston Bankruptcy Attorneys
http://canadylawgroup.com
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. 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.
