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In order for a Chapter 11 debtor to reorganize, the debtor must file (and the court must confirm) a plan of reorganization. In effect, the plan is a compromise between the major stakeholders in the case, including the debtor and its creditors. [5] Most Chapter 11 cases aim to confirm a plan, but that may not always be possible.
In most jurisdictions, a liquidator's powers are defined by statute. [3] Certain powers are generally exercisable without the requirement of any approvals; others may require sanction, either by the court, by an extraordinary resolution (in a members' voluntary winding up) or the liquidation committee or a meeting of the company's creditors .In the United Kingdom, see sections 165-168 of the ...
In Chapters 7, 12, and 13, creditors must file a "proof of claim" to be paid. In a Chapter 11 case, a creditor is not required to file a proof of claim (that is, a proof of claim is "deemed filed") if the creditor's claim is listed on the debtor's bankruptcy schedules, unless the claim is scheduled as "disputed, contingent, or unliquidated". [34]
Chapter 7 of Title 11 U.S. Code is the bankruptcy code that governs the process of liquidation under the bankruptcy laws of the U.S. In contrast to bankruptcy under Chapter 11 and Chapter 13, which govern the process of reorganization of a debtor, Chapter 7 bankruptcy is the most common form of bankruptcy in the U.S. [1]
In the United States, a general assignment or an assignment for the benefit of creditors is simply a contract whereby the insolvent entity ("assignor") transfers legal and equitable title, as well as custody and control of its property, to a third party ("assignee") in trust, to apply the proceeds of sale to the assignor's creditors in accord with priorities established by law.
Liquidation may either be compulsory (sometimes referred to as a creditors' liquidation or receivership following bankruptcy, which may result in the court creating a "liquidation trust"; or sometimes a court can mandate the appointment of a liquidator e.g. wind-up order in Australia) or voluntary (sometimes referred to as a shareholders ...
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Alternatively, a creditor can petition the court for a winding-up order which, if granted, will place the company into what is called compulsory liquidation or winding up by the court. The liquidator realises the assets of the company and distributes funds realised to creditors according to their priorities, after the deduction of costs.