Chapter 11 Bankruptcy For Businesses

Chapter 11 is a reorganization proceeding, typically for corporations or partnerships. High net worth individuals, especially those whose debts exceed the dischargeable limits of Chapter 13, may also 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.