Examples of Chapter 11 in the following topics:
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- When a business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either Chapter 7 or Chapter 11 of the Bankruptcy code.
- In Chapter 7, the business ceases operations, a trustee sells all of its assets, and then distributes the proceeds to its creditors.
- In Chapter 11, in most instances, the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court.
- As an example, after an accounting scandal and a chapter 11 bankruptcy at the giant telecommunications company Worldcom in 2004, its bondholders ended up being paid 35.7 cents on the dollar.
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- Furthermore, a US trustee may be heard on any issue in any bankruptcy case, except for filing a Chapter 11 plan of reorganization.
- Bankruptcy under Chapter 11, 12, or 13 requires more complex reorganization, and involves allowing the debtor to keep some or all of his or her property and to use future earnings to pay off creditors.
- Individuals usually file Chapter 7 or Chapter 13.
- Chapter 11 is commonly the form of re-organizational bankruptcy frequently entered into by businesses.
- Debtors may "emerge" from a Chapter 11 bankruptcy within a few months or several years, depending on the size and complexity of the bankruptcy.
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- In the U.S. firms that go bankrupt normally file for Chapter 7 or 11.
- Chapter 7 involves basic liquidation for businesses.
- Chapter 7 is the simplest and quickest form of bankruptcy available.
- Chapter 11 involves rehabilitation or reorganization and is known as corporate bankruptcy.
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