My first employer after law school, United States District Judge Carl B. Rubin, was fond of saying that only crazy or desperate people take cases to trial?everyone else settles. He may have been exaggerating a little, but what was true in the 1970’s is still true today: the overwhelming bulk of all lawsuits in all courts settle before trial. That is no less true in bankruptcy court. Particularly in large chapter 11 cases, compromise is king. The shortest way to chapter 7 liquidation is to try to litigate your way into a chapter 11 plan. Generally speaking, if you cannot cut a deal with your major creditors, you cannot get a chapter 11 plan confirmed, and the business cannot be reorganized.
Please see full article below for more information.