What is Chapter 11 bankruptcy?

Chapter 11 bankruptcy is a form of bankruptcy protection that is available to businesses in the United States. It is a form of reorganization bankruptcy, meaning it is designed to help businesses that are struggling financially to reorganize their finances and stay operational. In Minnesota, like all other states, Chapter 11 bankruptcy provides businesses with the legal protection to stay in operation while working with creditors and the court to construct a repayment plan. It can be used by businesses of all sizes, from large corporations to small, locally owned shops. Under Chapter 11 bankruptcy, businesses can be allowed to continue operating, even if only temporarily, while attempting to resolve their financial issues. Unlike a Chapter 7 bankruptcy, the debtor continues to maintain control of their operations. This includes decisions regarding hiring, firing, and continuing to provide goods and services. When filing for Chapter 11 bankruptcy, businesses are required to make the proposed repayment plan available to all creditors. Creditors can then initiate a voting process, by which all creditors can either approve or reject the plan. Once the plan has been approved, the debtor can continue to operate while making payments to creditors subject to court supervision. Chapter 11 bankruptcy can provide businesses with the legal protection they need to reorganize their finances and attempt to stay in operation. It is an important option for businesses in Minnesota, as it can allow them to remain open and operate while restructuring their debt.

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What is Chapter 11 bankruptcy?

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