Another type of bankruptcy is known as Chapter 11. This is essentially a form of corporate financial reorganization. Companies’ assets get sold off to pay their debts. However, it allows a company to continue to function and restore their finances.
If the company has stockholders, they will continue to get their monies. The idea is that the business will continue to generate revenue, make jobs, and pay creditors. They actually refer to Chapter 11 as “strategic”. Managements re-organize for political reasons and not just for balancing their books. There is no limit on the size of the debts.
There are certain groups that can’t file for Chapter 11 such as insurance companies, utilities, conglomerates. In large scale cases the government may even become involved. This chapter is mostly under purview of state law.
For more information on Chapter 11 bankruptcy, contact a competent Bakersfield bankruptcy attorney today.