Tag Archives: claims
When Is a Trustee Appointed in Place of a Debtor in Possession?
During a Chapter 11 bankruptcy proceeding, company leaders usually can expect to remain in control as debtors in possession, which allows them to oversee the restructuring process and continue business operations. Appointing a Chapter 11 trustee is an exception to the usual practice and typically arises when there are serious concerns about the debtor in […]
How Becoming a Debtor in Possession Changes a Business Owner’s Role
Chapter 11 bankruptcy is a remedy designed to help a distressed business gain debt relief, reorganize and return to solvency. A defining feature of Chapter 11 is that the existing equity owner often remains in control of the company as a “debtor in possession” (DIP). However, an important transformation occurs. The business owner’s role shifts […]
What Are the Essential Contents of a Chapter 11 Plan?
Chapter 11 of the United States Bankruptcy Code provides a mechanism for financially distressed businesses to reorganize their debts and operations. A Chapter 11 plan serves as the roadmap for this reorganization, outlining how claims and interests will be treated. It is based on whether the business can be reorganized for a return to solvency […]
Company Equity Holders’ Rights and Remedies in Chapter 11
In a Chapter 11 bankruptcy, company equity holders (shareholders) occupy a precarious position in the hierarchy of claims. They are typically last in line to receive payment due to their subordinate position in the capital structure. However, through negotiations and the infusion of new capital, they can sometimes retain a portion of their equity or […]
