What is Chapter 11 and what does it do?
Chapter 11 of the US bankruptcy code is designed to allow a
debtor to rehabilitate and to provide an orderly process for
creditors and equity holders to recover assets in an orderly
manner. Corporations tend to file Chapter 11 if they require
time to restructure their debts, and while a Chapter 11
bankruptcy allows a debtor a fresh start, they are required to
fulfill the terms in order to successfully exit the
Chapter 11 is a tool used to accomplish a very specific
goal. "The endgame of Chapter 11 is a plan of reorganisation
that establishes a framework of what a company's capital
structure should look like, what kind of debt it can sustain,
and what creditor recoveries will be. The process can afford
companies the opportunity to rework their balance sheets or
deal with the operational issues necessary to...