Articles on Stock markets

News, Research and Analysis

Help Center
Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal Finance
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What is Chapter 11?

Chapter 11 is a type of bankruptcy filing a company can make to give itself time to reorganize and hopefully continue business.

There are different types of bankruptcy filings a person or business can make, depending on how overwhelming their debt load is. Chapter 11 is a kind of bankruptcy filing that allows the corporate leadership to stay in control of a company while trading freezes on their stock and the company and its debts are reorganized. This is called “debtor in possession.”

A committee will be formed with the company’s unsecured creditors, and they will vote on whether decisions made by the debtor in possession during this restructuring are appropriate actions. If a corporation files Chapter 11, the assets of the owners are separate and distinct. If it is a sole proprietor, the personal assets of the owner are likely to be included, and it closely resembles a Chapter 13 filing.

Trading of the stock on exchanges will be frozen, called a moratorium, but some over-the-counter trading will continue.

Keywords: moratorium, debtor in possession, creditors' committee, stock exchanges, bankruptcy filings, Chapter 11,