Chapter 11 is a chapter of the US bankruptcy code that gives a company an opportunity to reorganise and emerge from bankruptcy. Chapter 11 bankruptcy is a form of corporate financial reorganisation in which a company’s assets gets sold off to pay creditors. In some cases, Chapter 11 bankruptcy allows companies to continue to function. Creditors must vote to approve the reorganisation plan. If a plan cannot be agreed, the court can either convert the case to a liquidation under Chapter 7 or, if this is in the interest of creditors, return the business to the status quo before bankruptcy. Individuals may also be able to file for Chapter 11 bankruptcy.
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