What Are Some Alternatives to Chapter 11 and How Do They Affect Creditors?

LexBlog

Factuality

Ownership

What Are Some Alternatives to Chapter 11 and How Do They Affect Creditors?

Financially distressed companies have several alternatives to Chapter 11 bankruptcy, including workouts, assignments for the benefit of creditors (ABC), and Chapter 7 liquidation. Each option has distinct processes and impacts on creditors, which are crucial for understanding how to navigate these situations effectively. In a workout, companies negotiate debt modifications directly with creditors, allowing the business to continue operating whil…