Chapter 11
"Chapter 11" is the section of the United States Bankruptcy Code that allows businesses to reorganize and continue in business after it has filed for bankruptcy. This is in contrast to Chapter 7 of the U.S Bankruptcy Code that provides for the liquidation of a business that has filed for bankruptcy, i.e. an orderly ending of its operations.
How It's Used
“Because even in the unlikely development that regulators would welcome capacity-shrinking mergers, the immediate costs and disruption would likely bankrupt the combined carriers before any benefits materialize. Continental and US Airways, looking at United as a potential life raft, looked closely and now see a ticket straight to Chapter 11.” —Holman W. Jenkins, Jr., “The Second Death of the U.S. Airlines,” The Wall Street Journal, June 18, 2008, p. A13. “Auto CEOs Rick Wagoner and Robert Nardelli breathed sighs of relief at the news—President [George W.] Bush opted not to force their companies to restructure through Chapter 11 bankruptcy, riling Republican free-marketeers in the Senate.” —Lydia DePillis, “D.C. to Detroit: Die Another Day,” Slate, December 20, 2008. "Yet another analog bookseller has taken a step closer to a digital demise. Borders filed for Chapter 11 bankruptcy this morning, hoping to restructure its finances and reboot its operations.
"The book retailer announced the news this morning. At a site set up for the occasion, Borders comforted customers that 'Borders stores are open for business' but warned that it 'will be closing underperforming stores within our network over the next several weeks.' It says it's lined up $505 million in debtor-in-possession financing to get through its restructuring." —Rob Pegoraro, "Borders turns page to Chapter 11," The Washington Post, February 16, 2011. Links Related on eAlmanac
Chapter 7
Beyond eAlmanac
Wikipedia article on Chapter 11
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