Under
Chapter 11 Business Bankruptcy is a legal process by which a business
may declare bankruptcy but continue to operate under the direction of a
court-appointed trustee.
This
process is called "reorganization," because the trustee reorganizes the
business to be more efficient and to be able to pay the creditors of
the business. The bankruptcy court may also exempt the business from
paying all or part of its debts.
Chapter
11 bankruptcy is usually sought and granted in the case where the value
of the business is greater than the sum of its assets; in other words,
the business has a significant amount of goodwill as a "going concern"
which would be lost if the business were sold or liquidated.
In
many cases, a business may re-emerge from Chapter 11 and continue to
operate normally. In other cases, the reorganized business can be sold
after some period of time.
