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Chapter 11 biography, Chapter 11 discography
Please bear with us as we redesign our website to better serve you.Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States.Definition
2 Rationale
3 Details
3.Stock
5 Criticism
6 Statistics
6.Definition
When a troubled business is unable to service its debt or pay its creditors, it or its creditors can file with a federal bankruptcy court for protection under either chapter 7 or chapter 11.This is done in accordance with statutory defined priorities.The court can grant complete or partial relief from most of the company's debts and its contracts, so that the company can make a fresh start.Rationale
In enacting chapter 11 of the Bankruptcy code, Congress concluded that it is sometimes the case that the value of a business is greater if sold or reorganized as a going concern than the value of the sum of its parts if the business's assets were to be sold off individually.It follows that it may be more economically efficient to allow a troubled company to continue running, cancel some of its debts, and give ownership of the newly reorganized company to the creditors whose debts were canceled.In this way, jobs may be saved, the engine of profitability which is the business is maintained rather than being dismantled, and, as a proponent of a chapter 11 plan is required to demonstrate as a precursor to plan confirmation, the business's creditors end up with more money than they would in a chapter 7 liquidation.Details
All creditors are entitled to be heard by the court which is responsible for determining whether the plan of reorganization complies with the purposes of the bankruptcy law and provides for fair and equitable treatment of all parties in interest.Some contracts, known as executory contracts, may be rejected if canceling them would be financially favorable to the company and its creditors.Such contracts 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 the event of a rejection, the remaining parties to the contract become unsecured creditors of the debtor.Chapter 11 is reorganization, as opposed to liquidation.Debtors may "emerge" from a chapter 11 bankruptcy within a few months or within several years, depending on the size and complexity of the bankruptcy.Debtors in Chapter 11 have the exclusive right to propose a plan of reorganization for a period of time.If the case is dismissed, creditors will look to nonbankruptcy law in order to satisfy their claims.Under some circumstances, creditors or the United States Trustee can ask the court to convert the case to a liquidation under Chapter 7, or to appoint a trustee to manage the debtor's business.Chapter 7 liquidation would be likely to achieve.Priority
Chapter 11 follows the same priority scheme as other bankruptcy chapters.Each priority level must be paid in full before the next lowest priority level may receive payment.Stock
If the company's stock is publicly traded, a Chapter 11 filing generally causes it to be delisted from its primary stock exchange if listed on the New York Stock Exchange, the American Stock Exchange, or the NASDAQ.Penn Central, whose symbol was originally "PC" and became "QPC" after the company filed Chapter 11 in 1970).Many stocks that are delisted quickly resume listing as over the counter (OTC) stocks.In the overwhelming majority of cases, the Chapter 11 plan, when confirmed, terminates the shares of the company rendering shares valueless.Individuals may also file Chapter 11, but due to the complexity and expense of the proceeding, this option is rarely chosen by debtors who are eligible for Chapter 7 or Chapter 13 relief.Criticism
Some critics have claimed that Chapter 11 bankruptcy is excessively lenient in giving a needless "escape hatch" to the incompetent management of a failing company, damaging the efficiency of the economy as a whole and allowing poor managers to continue managing.It is unusual for the management of a company in Chapter 11 to be fired, as it is usually assumed that the present management team knows far more about the company and its customers than would a new set of management.Another efficiency criticism is that a company undergoing Chapter 11 bankruptcy is effectively operating under the "protection" of the court until it emerges, in some cases giving the bankrupt company a great advantage against its competitors, distorting the market and harming more competitive businesses.United States, and thereby increases the cost of secured lending.Insolvency proceedings under state law, the study stated, are currently faster, less expensive, and more private, with some states not even requiring court filings.Chapter 11 filing in 2002; the bankruptcy was triggered by the discovery that in the previous several years, the company had fraudulently overreported its assets by an estimated 12 billion dollars.Retrieved on November 17, 2005.The night of the killer zombies.Complete Title 11 (ZIP file), via www.Bankruptcy FAQ question and answer forum, via www.All text is available under the terms of the GNU Free Documentation License.Reorganization Under the Bankruptcy Code
The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership.People in business or individuals can also seek relief in chapter 11.An individual cannot file under chapter 11 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens.In addition, no individual may be a debtor under chapter 11 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.There are exceptions in emergency situations or where the U.If a debt management plan is developed during required credit counseling, it must be filed with the court.How Chapter 11 Works
A chapter 11 case begins with the filing of a petition with the bankruptcy court serving the area where the debtor has a domicile or residence.Form 1 of the Official Forms prescribed by the Judicial Conference of the United States.Unless the court orders otherwise, the debtor also must file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs.Such debtors must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts.The Official Forms are not available from the court, but may be purchased at legal stationery stores or downloaded from the Internet at www.The fees must be paid to the clerk of the court upon filing or may, with the court's permission, be paid by individual debtors in installments.The final installment must be paid not later than 120 days after filing the petition.Debtors should be aware that failure to pay these fees may result in dismissal of the case.The voluntary petition will include standard information concerning the debtor's name(s), social security number or tax identification number, residence, location of principal assets (if a business), the debtor's plan or intention to file a plan, and a request for relief under the appropriate chapter of the Bankruptcy Code.The term refers to a debtor that keeps possession and control of its assets while undergoing a reorganization under chapter 11, without the appointment of a case trustee.Generally, a written disclosure statement and a plan of reorganization must be filed with the court.The disclosure statement is a document that must contain information concerning the assets, liabilities, and business affairs of the debtor sufficient to enable a creditor to make an informed judgment about the debtor's plan of reorganization.The contents of the plan must include a classification of claims and must specify how each class of claims will be treated under the plan.After the disclosure statement is approved by the court and the ballots are collected and tallied, the court will conduct a confirmation hearing to determine whether to confirm the plan.In the case of individuals, chapter 11 bears some similarities to chapter 13.For example, property of the estate for an individual debtor includes the debtor's earnings and property acquired by the debtor after filing until the case is closed, dismissed or converted; funding of the plan may be from the debtor's future earnings; and the plan cannot be confirmed over a creditor's objection without committing all of the debtor's disposable income over five years unless the plan pays the claim in full, with interest, over a shorter period of time.The Chapter 11 Debtor in Possession
Chapter 11 is typically used to reorganize a business, which may be a corporation, sole proprietorship, or partnership.The chapter 11 bankruptcy case of a corporation (corporation as debtor) does not put the personal assets of the stockholders at risk other than the value of their investment in the company's stock.Like a corporation, a partnership exists separate and apart from its partners.Section 1107 of the Bankruptcy Code places the debtor in possession in the position of a fiduciary, with the rights and powers of a chapter 11 trustee, and it requires the debtor to perform of all but the investigative functions and duties of a trustee.These duties, set forth in the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, include accounting for property, examining and objecting to claims, and filing informational reports as required by the court and the U.The debtor in possession also has many of the other powers and duties of a trustee, including the right, with the court's approval, to employ attorneys, accountants, appraisers, auctioneers, or other professional persons to assist the debtor during its bankruptcy case.Railroad reorganizations have specific requirements under subsection IV of chapter 11, which will not be addressed here.In addition, stock and commodity brokers are prohibited from filing under chapter 11 and are restricted to chapter 7.Should a debtor in possession fail to comply with the reporting requirements of the U.Bankruptcy Code or to have the case dismissed.For purposes of this publication, references to U.Creditors' committees can play a major role in chapter 11 cases.The committee is appointed by the U.The Small Business Case and the Small Business Debtor
In some smaller cases the U.Second, the debtor's case must be one in which the U.In contrast to other chapter 11 debtors, the small business debtor is subject to additional oversight by the U.Because certain filing deadlines are different and extensions are more difficult to obtain, a case designated as a small business case normally proceeds more quickly than other chapter 11 cases.For example, only the debtor may file a plan during the first 180 days of a small business case.The Single Asset Real Estate Debtor
Single asset real estate debtors are subject to special provisions of the Bankruptcy Code.The Bankruptcy Code provides circumstances under which creditors of a single asset real estate debtor may obtain relief from the automatic stay which are not available to creditors in ordinary bankruptcy cases.On request of a creditor with a claim secured by the single asset real estate and after notice and a hearing, the court will grant relief from the automatic stay to the creditor unless the debtor files a feasible plan of reorganization or begins making interest payments to the creditor within 90 days from the date of the filing of the case, or within 30 days of the court's determination that the case is a single asset real estate case.Appointment or Election of a Case Trustee
Although the appointment of a case trustee is a rarity in a chapter 11 case, a party in interest or the U.The trustee is appointed by the U.In that instance, the U.The Role of an Examiner
The appointment of an examiner in a chapter 11 case is rare.The examiner is authorized to perform the investigatory functions of the trustee and is required to file a statement of any investigation conducted.If ordered to do so by the court, however, an examiner may carry out any other duties of a trustee that the court orders the debtor in possession not to perform.In some cases, the examiner may file a plan of reorganization, negotiate or help the parties negotiate, or review the debtor's schedules to determine whether some of the claims are improperly categorized.Sometimes, the examiner may be directed to determine if objections to any proofs of claim should be filed or whether causes of action have sufficient merit so that further legal action should be taken.The examiner may not subsequently serve as a trustee in the case.The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition.As with cases under other chapters of the Bankruptcy Code, a stay of creditor actions against the chapter 11 debtor automatically goes into effect when the bankruptcy petition is filed.The filing of a petition, however, does not operate as a stay for certain types of actions listed under 11 U.Under specific circumstances, the secured creditor can obtain an order from the court granting relief from the automatic stay.Thus, a trustee, a debtor's attorney, or any professional person appointed by the court may apply to the court at intervals of 120 days for interim compensation and reimbursement payments.In very large cases with extensive legal work, the court may permit more frequent applications.Although professional fees may be paid if authorized by the court, the debtor cannot make payments to professional creditors on prepetition obligations, i.But, in no event, may the exclusivity period, including all extensions, be longer than 18 months.After the exclusivity period has expired, a creditor or the case trustee may file a competing plan.The creditors' right to file a competing plan provides incentive for the debtor to file a plan within the exclusivity period and acts as a check on excessive delay in the case.Cash Collateral, Adequate Protection, and Operating Capital
Although the preparation, confirmation, and implementation of a plan of reorganization is at the heart of a chapter 11 case, other issues may arise that must be addressed by the debtor in possession.The debtor in possession may use, sell, or lease property of the estate in the ordinary course of its business, without prior approval, unless the court orders otherwise.If the intended sale or use is outside the ordinary course of its business, the debtor must obtain permission from the court.Pending consent of the secured creditor or court authorization for the debtor in possession's use of cash collateral, the debtor in possession must segregate and account for all cash collateral in its possession.Adequate protection may be required to protect the value of the creditor's interest in the property being used by the debtor in possession.This is especially important when there is a decrease in value of the property.The debtor may make periodic or lump sum cash payments, or provide an additional or replacement lien that will result in the creditor's property interest being adequately protected.Before confirmation of a plan, several activities may take place in a chapter 11 case.The most common are those seeking relief from the automatic stay, the use of cash collateral, or to obtain credit.Delays in formulating, filing, and obtaining confirmation of a plan often prompt creditors to file motions for relief from stay, to convert the case to chapter 7, or to dismiss the case altogether.Frequently, the debtor in possession will institute a lawsuit, known as an adversary proceeding, to recover money or property for the estate.The Bankruptcy Code defines a claim as: (1) a right to payment; (2) or a right to an equitable remedy for a failure of performance if the breach gives rise to a right to payment.The debtor must provide notification to those creditors whose names are added and whose claims are listed as a result of an amendment to the schedules.Generally, most of the provisions that apply to proofs of claim, as discussed above, are also applicable to proofs of interest.Alternatively, the court may decide that appointment of a chapter 11 trustee or an examiner is in the best interests of creditors and the estate.Section 1112(b)(4) of the Bankruptcy Code sets forth numerous examples of cause that would support dismissal or conversion.For example, the moving party may establish cause by showing that there is substantial or continuing loss to the estate and the absence of a reasonable likelihood of rehabilitation; gross mismanagement of the estate; failure to maintain insurance that poses a risk to the estate or the public; or unauthorized use of cash collateral that is substantially harmful to a creditor.Cause for dismissal or conversion also includes an unexcused failure to timely comply with reporting and filing requirements; failure to attend the meeting of creditors or attend a Fed.Section 1112(c) of the Bankruptcy Code provides an important exception to the conversion process in a chapter 11 case.Under this provision, the court is prohibited from converting a case involving a farmer or charitable institution to a liquidation case under chapter 7 unless the debtor requests the conversion.Generally, the debtor (or any plan proponent) must file and get court approval of a written disclosure statement before there can be a vote on the plan of reorganization.After the disclosure statement is filed, the court must hold a hearing to determine whether the disclosure statement should be approved.After the court approves the disclosure statement, the debtor or proponent of a plan can begin to solicit acceptances of the plan, and creditors may also solicit rejections of the plan.The court may extend (up to 20 months) or reduce this acceptance exclusive period for cause.If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan.Such a plan may compete with a plan filed by another party in interest or by the debtor.In a chapter 11 case, a liquidating plan is permissible.Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation.Section 1123(a) of the Bankruptcy Code lists the mandatory provisions of a chapter 11 plan, and section 1123(b) lists the discretionary provisions.Section 1123(a)(1) provides that a chapter 11 plan must designate classes of claims and interests for treatment under the reorganization.Generally, a plan will classify claim holders as secured creditors, unsecured creditors entitled to priority, general unsecured creditors, and equity security holders.Under section 1127(a) of the Bankruptcy Code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11.When there is a proposed modification after balloting has been conducted, and the court finds after a hearing that the proposed modification does not adversely affect the treatment of any creditor who has not accepted the modification in writing, the modification is deemed to have been accepted by all creditors who previously accepted the plan.Because more than one plan may be submitted to the creditors for approval, every proposed plan and modification must be dated and identified with the name of the entity or entities submitting the plan or modification.Any party in interest may file an objection to confirmation of a plan.The Bankruptcy Code requires the court, after notice, to hold a hearing on confirmation of a plan.If no objection to confirmation has been timely filed, the Bankruptcy Code allows the court to determine whether the plan has been proposed in good faith and according to law.Before confirmation can be granted, the court must be satisfied that there has been compliance with all the other requirements of confirmation set forth in section 1129 of the Bankruptcy Code, even in the absence of any objections.In order to confirm the plan, the court must find, among other things, that: (1) the plan is feasible; (2) it is proposed in good faith; and (3) the plan and the proponent of the plan are in compliance with the Bankruptcy Code.Section 1141(d)(1) generally provides that confirmation of a plan discharges a debtor from any debt that arose before the date of confirmation.Moreover, except in limited circumstances, a discharge is not available to an individual debtor unless and until all payments have been made under the plan.Confirmation does not discharge the debtor if the plan is a liquidation plan, as opposed to one of reorganization, unless the debtor is an individual.When the debtor is an individual, confirmation of a liquidation plan will result in a discharge (after plan payments are made) unless grounds would exist for denying the debtor a discharge if the case were proceeding under chapter 7 instead of chapter 11.This should be distinguished from preconfirmation modification of the plan.Notwithstanding the entry of the confirmation order, the court has the authority to issue any other order necessary to administer the estate.Sections 1106(a)(7) and 1107(a) of the Bankruptcy Code require a debtor in possession or a trustee to report on the progress made in implementing a plan after confirmation.Local bankruptcy court policies generally determine when the final decree is entered and the case closed.The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 11 case.Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable.What Every Investor Should Know ...Who protects the interests of investors?Do the old securities have any value when, and if, the company is reorganized?Federal bankruptcy laws govern how companies go out of business or recover from crippling debt.For example, secured creditors take less risk because the credit that they extend is usually backed by collateral, such as a mortgage or other assets of the company.Stockholders own the company, and take greater risk.The owners are last in line to be repaid if the company fails.In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange.Note: Investors should be cautious when buying common stock of companies in Chapter 11 bankruptcy.It is extremely risky and is likely to lead to financial loss.Although a company may emerge from bankruptcy as a viable entity, generally, the creditors and the bondholders become the new owners of the shares.This happens in bankruptcy cases because secured and unsecured creditors are paid from the company's assets before common stockholders.One is the old common stock (the stock that was on the market when the company went into bankruptcy), and the second is the new common stock that the company issued as part of its reorganization plan.Sometimes the new stock may not have been issued by the company, although it has been authorized.If you are a bondholder, you may receive new stock in exchange for your bonds, new bonds, or a combination of stock and bonds.If you are a stockholder, the trustee may ask you to send back your old stock in exchange for new shares in the reorganized company.The bankruptcy court may determine that stockholders don't get anything because the debtor is insolvent.If you don't know whether your stock has value, and you can't find a stock or bond price in the newspaper, ask your broker or the company for information.Why Would a Company Choose Chapter 11?Sometimes companies prepare a reorganization plan that is negotiated and voted on by creditors and stockholders before they actually file for bankruptcy.This shortens and simplifies the process, saving the company money.For example, Resorts International and TWA used this method.Chapter 11 rather than Chapter 7 because they can still run their business and control the bankruptcy process.Chapter 11 provides a process for rehabilitating the company's faltering business.Sometimes the company successfully works out a plan to return to profitability; sometimes, in the end, it liquidates.Under a Chapter 11 reorganization, a company usually keeps doing business and its stock and bonds may continue to trade in our securities markets.How Does Chapter 11 Work?However, even if creditors or stockholders vote to reject the plan, the court can disregard the vote and still confirm the plan if it finds that the plan treats creditors and stockholders fairly.This report must contain a summary of the plan, but sometimes a copy of the complete plan is attached.An additional official committee may sometimes be appointed to represent stockholders.Trustee may appoint another committee to represent a distinct class of creditors, such as secured creditors, employees or subordinated bondholders.After the committees work with the company to develop a plan, the bankruptcy court must find that it legally complies with the Bankruptcy Code before the plan can be implemented.This process is known as plan confirmation and is usually completed in a few months.Company prepares a disclosure statement and reorganization plan and files it with the court.SEC reviews the disclosure statement to be sure it's complete.Creditors (and sometimes the stockholders) vote on the plan.Company carries out the plan by distributing the securities or payments called for by the plan.What is the Role of the U.Exchange Commission in Chapter 11 Bankruptcies?If you hold a stock or bond in your own name, you should receive information directly from the company.Even when stockholders do not vote, they should get a summary of the disclosure statement, and a notice on how to file an objection to the plan.What is Chapter 7 Bankruptcy?Administrative and legal expenses are paid first, and the remainder goes to creditors.Secured creditors will have their collateral returned to them.If the value of the collateral is not sufficient to repay them in full, they will be grouped with other unsecured creditors for the rest of their claim.Bondholders, and other unsecured creditors, will be notified of the Chapter 7, and should file a claim in case there's money left for them to receive a payment.Usually, the stock of a Chapter 7 company is worthless and you have lost the money you invested.If you hold a bond, you might only receive a fraction of its face value.It will depend on the amount of assets available for distribution and where your debt ranks in the priority list on the first page.If your bond is secured by collateral, your payment will depend in large part on the value of the collateral.Contact the investor relations department in the company's home office.They can give you more information on the bankruptcy proceeding, including the name, address, and phone number of the court handling the bankruptcy.If you can't find information in the newspaper or the library, or you haven't received any correspondence from the company, call the person who sold you the investment.Companies file regular reports with the SEC in a computer database known as EDGAR.K, or any other reports that the company files with the SEC, from the SEC's Public Reference Room,
100 F Street NE, Washington, D.Court addresses and phone numbers are also listed in the publication, The American Bench, which you can find at your local library.Trustee's website, your local telephone book, or the public library for the field office closest to you, and contact them for information on the status of the bankruptcy.If you suspect fraud, you should also report it to the SEC or your state securities regulator.Contact Chapter 11 Library for More Information About Our Services.Briarwood Presbyterian Church
Wednesday, February 27, 2008
worshipping.Please try the following:If you typed the resource address in the Address bar, make sure that it is spelled correctly.Use the search page to look for more information.In those early days, there was almost universal support among the people for this widespread dragnet.The strange downfall of WTC building 7 has troubled many researchers since the day it happened.Twin Towers that fell on the same day.There will always be unanswered questions."You have come to this CHAPTER 11 page about "+gettimes()+" before."Chapter 11 bankruptcy is a form of reorganization available to individuals,
corporations and partnerships.It has no limits on the amount
of debt, as Chapter 13 does.The debtor usually
remains in possession of its assets, and operates the business under the
supervision of the court and for the benefit of creditors.The debtor in
possession is a fiduciary for the
creditors.If the debtor's management is ineffective or less than honest,
a trustee may be appointed.Trustee from among the
20 largest, unsecured creditors who are not
insiders.The committee represents all of the creditors in providing
oversight for the debtor's operations and a body with whom the debtor can
negotiate an acceptable plan of reorganization.
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