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FAQ / How are reorganizations or liquidations accomplished under chapter 11?Reorganizations are accomplished by a plan of reorganization that is voted on and approved by creditors and/or shareholders and then confirmed by the bankruptcy court, all in accordance with various procedures outlined in the Bankruptcy Code. Liquidations in chapter 11 may be accomplished in the same manner, although in some cases liquidations are accomplished by court authorized sales of assets by the debtor prior to, or without ever, confirming a plan. However, the practice of liquidating through a series of assets sales alone is not favoured by some courts since it is often seen as an effort to circumvent the more rigorous requirements of the plan confirmation process. |
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