Chapter 11 of US Bankruptcy court

Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to any business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most prominently used by corporate entities. In contrast, Chapter 7 governs the process of a liquidation bankruptcy, while Chapter 13 provides a reorganization process for the majority of private individuals with unsecured debts of less than $336,900.00 and secured debts of less than $1,010,650.00 as of April 1, 2007. When a troubled business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either chapter 7 or chapter 11. In chapter 7, the business ceases operations and a trustee sells all of its assets and distributes the proceeds to its creditors. A chapter 11 filing is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations. In most instances the debtor remains in control of its business operations as a "debtor in possession", and is subject to the oversight and jurisdiction of the court. [1] The court can grant complete or partial relief from most of the company's debts and its contracts, so that the company can make a fresh start. Sometimes, if the business's debts exceed its assets, then at the completion of bankruptcy the company's owners all end up without anything; all their rights and interests are ended and the company's creditors are left with ownership of the newly reorganized company.

Priority
As a general rule secured creditorscreditors who have a security interest, or collateral, in the debtor's propertywill be paid before unsecured creditors. Unsecured creditors' claims are prioritized by 507. For instance the claims of suppliers of products or employees of a company may be paid before other unsecured creditors are paid. Each priority level must be paid in full before the next lowest priority level may receive payment.

Stock
If the company's stock is publicly traded, a chapter 11 filing generally causes it to be delisted from its primary stock exchange if listed on the New York Stock Exchange, the American Stock Exchange, or the NASDAQ. On the NASDAQ the identifying fifth letter "Q" at the end of a stock symbol indicates the company is in bankruptcy (formerly the "Q" was placed in front of the pre-existing stock symbol; a celebrated example was Penn Central, whose symbol was originally "PC" and became "QPC" after the company filed Chapter 11 in 1970). Many stocks that are

delisted quickly resume listing as over the counter (OTC) stocks. In the overwhelming majority of cases, the Chapter 11 plan, when confirmed, terminates the shares of the company rendering shares valueless. Individuals may file Chapter 11, but due to the complexity and expense of the proceeding, this option is rarely chosen by debtors who are eligible for chapter 7 or chapter 13 relief.

Some of largest Bankruptcy filed

Company Lehman Brothers Holdings Inc. Washington Mutual Worldcom Inc. Enron Corp.* Conseco, Inc. Texaco, Inc. Financial Corp. of America Refco Inc. Global Crossing Ltd. Pacific Gas and Electric Co. UAL Corp. Delta Air Lines, Inc. Adelphia Communications MCorp Mirant Corporation Bankruptcy Total Assets PreDate Bankruptcy 2008-09-15 2008-09-26 2002-07-21 2001-02-12 2002-12-18 1987-04-12 1988-09-09 2005-10-17 2002-01-28 2001-04-06 2002-12-09 2005-09-14 2002-06-25 1989-03-31 2003-07-14 $639,063,000,000 $327,913,000,000 $103,914,000,000 $63,392,000,000 $61,392,000,000 $35,892,000,000 $33,864,000,000 $33,333,172,000 $30,185,000,000 $29,770,000,000 $25,197,000,000 $21,801,000,000 $21,499,000,000 $20,228,000,000 $19,415,000,000 Filing Court District NY-S DE NY-S NY-S IL-N NY-S CA-C NY-S NY-S CA-N IL-N NY-S NY-S TX-S TX-N