What can happen to a company that files for bankruptcy (Section 363) under Chapter 11 of the Bankruptcy Code?

Question

can it be liquidated?

Answer 1

Maybe.

Chapter 11 allows a debtor to reorganize, getting rid of burdensome agreements and restructuring and/or eliminating debt. The goal is that the company will emerge from bankruptcy with an improved balance sheet. Chapter 11 allows the debtor's management to remain in control of the business throughout this process (subject to court supervision).

A company that is planning to liquidate (sell everything off) files under Chapter 7 instead.

But sometimes, for strategic reasons, a company planning to liquidate will initially file under Chapter 11 intending to eventually convert to a Chapter 7. A debtor might choose to do so because of the advantages and flexibility of Chapter 11 will allow it to liquidate in a more efficient manner. A Chapter 11 could also convert to a Chapter 7 for other reasons. For example, a company in Chapter 11 might be unable to secure acceptable financing terms, causing it to decide to liquidate instead of reorganizing.

So although a Chapter 11 case doesn't anticipate liquidation strictly speaking, it could eventually happen.

Answer 2

The inventory nevertheless trades on between the exchanges. oftentimes the letter "Q" turns into element of the emblem. i imagine Circuit city is in financial disaster 7; yet, I easily have offered stocks of authentic organizations in financial disaster eleven inclusive of corporations who've furnish contracts which will damage them. Circuit city, btw, has 2 symbols CCQ.F and CCTYQ.PK. Sorry, i won't be able to imagine of a financial disaster eleven inventory fairly worth a at the same time as because the week as been lengthy. yet, in case you comprehend a company and why the financial disaster eleven became filed, you may do properly in any sort of market. i think like technologies organizations are too complicated for me to comprehend with innovation through competition.

Answer 3

No, Chapter 11 bankruptcy filing is for re-organization and reduction of debt. However, if this company is public, investors will most likely lose their shares value.

Answer 4

no