More often than not, Chapter 11 debtors seek to exit bankruptcy by confirming a Chapter 11 plan of reorganization or liquidation. However, not only is this approach expensive, but it requires that the debtors have sufficient funds to pay administrative and priority claims in full in order to confirm the plan. A structured dismissal is sometimes proposed as an alternative to a Chapter 11 plan of liquidation or conversion of the bankruptcy case to Chapter 7.
Troutman Pepper Locke's Creditor’s Rights Toolkit is a series that provides practical insights to help creditors confront the challenges of commercial bankruptcy.
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