While often more expensive, Chapter 11 has a fast track option.
A Chapter 11 proceeding is one in which the debtor generally retains possession of the assets of the estate and tries to reorganize the business. Chapter 11 is sometimes called the “Cadillac” of bankruptcies and is usually more expensive and time-consuming than other types of bankruptcies. The debtor proposes a plan through which the debtor plans to pay creditors and return the business to profitability. Creditors are then given the opportunity to vote on the acceptability of the plan. This white paper reviews the requirements a debtor must satisfy before the Court will approve a plan of reorganization, and discusses how debtors also have great flexibility in what they can do to modify their debt obligations and in how and how long they take to repay creditors.
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