What are some key attributes of chapter 11?
Some key Chapter 11 attributes are the following: • Chapter 11 is not a declaration of insolvency. • Companies don’t file chapter 11 to liquidate; they do so in order to continue operating and to take the necessary steps to emerge as a financially stronger business, reorganizing their operations or balance sheet or in some cases by selling substantially all its assets. • Management remains in control of the business during the chapter 11 rehabilitative process. Trustees, administrators and monitors typically are not appointed. • Chapter 11 normally does not cause interruption to business operations. • The company is given breathing room during the process – an “automatic stay” generally prevents parties from taking legal action against the company or taking the company’s assets.
