Chapter 11 Cases

Chapter 11 refers to a section of the U.S. Bankruptcy Code that allows businesses to reorganize their debts while continuing to operate. When a company faces financial difficulties but believes it can turn its fortunes around, it files for Chapter 11 protection. This process provides the company with a chance to restructure its debts and develop a repayment plan, often while seeking to reduce expenses and improve operations. Creditors are typically given a say in the reorganization plan, and the goal is to return the company to profitability while ensuring fair treatment of stakeholders.