Chapter 11 Business Bankruptcy
Under Chapter 11 Business Bankruptcy is a legal process by which a business may declare bankruptcy but continue to operate under the direction of a court-appointed trustee. This process is called "reorganization," because the trustee reorganizes the business to be more efficient and to be able to pay the creditors of the business. The bankruptcy court may also exempt the business from paying all or part of its debts. Chapter 11 bankruptcy is usually sought and granted in the case where the value of the business is greater than the sum of its assets; in other words, the business has a significant amount of goodwill as a "going concern" which would be lost if the business were sold or liquidated.
In many cases, a business may re-emerge from Chapter 11 and continue to operate normally. In other cases, the reorganized business can be sold after some period of time.
Chapter 11 is available to any type of business, including sole proprietorships, Limited Liability Companies (LLCs), and corporations.
Bank to Bankruptcy Overview
