Chapter 11 liquidating trustee
An example of proceedings that are not necessarily stayed automatically are family law proceedings against a spouse or parent.
Further, creditors may file with the court seeking relief from the automatic stay.
Chapter 11 is a chapter of Title 11 of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States.
Chapter 11 bankruptcy is available to every business, whether organized as a corporation, partnership or sole proprietorship, and to individuals, although it is most prominently used by corporate entities.
If the business is insolvent, its debts exceed its assets and the business is unable to pay debts as they come due, the bankruptcy restructuring may result in the company's owners being left with nothing; instead, the owners' rights and interests are ended and the company's creditors are left with ownership of the newly reorganized company.
All creditors are entitled to be heard by the court.
In contrast, Chapter 7 governs the process of a liquidation bankruptcy (although liquidation can go under this chapter), while Chapter 13 provides a reorganization process for the majority of private individuals.
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. § 1108 empowers the trustee to operate the debtor's business.
In order to be confirmed over their objection the plan must not discriminate against that class of creditors, and the plan must be found fair and equitable to that class.Such contracts may include labor union contracts, supply or operating contracts (with both vendors and customers), and real estate leases.The standard feature of executory contracts is that each party to the contract has duties remaining under the contract.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. A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business's earnings.Chapter 11 retains many of the features present in all, or most, bankruptcy proceedings in the U. The court may also permit the debtor in possession to reject and cancel contracts.