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Chapter 11 bankruptcy
A provision of the U.S. bankruptcy law which enables a failing firm to apply to the courts for protection against all creditors while it is reorganized to pay its debts. This provision enables a firm to avoid being closed down by any single creditor and gives investors a chance to decide whether the firm can again be made profitable. At the same time, it gives dishonest management the opportunity to loot the firm's assets while the case is before the courts.
Example Sentences
Merit Street’s Chapter 11 bankruptcy filing lists the company’s liabilities at $100 million to $500 million.
Once valued at $6 billion, 23andMe filed for Chapter 11 bankruptcy in March.
LL Flooring, the flooring retailer formerly known as Lumber Liquidators, filed for Chapter 11 bankruptcy protection last August and announced that it would close about a quarter of its locations nationwide.
At Home, the home goods retailer, has filed for Chapter 11 bankruptcy protection and announced the closure of 26 stores, as it tries to recover from a slowdown in sales and the impacts of inflation and tariffs.
As part of 23andMe’s Chapter 11 bankruptcy, a judge approved the appointment of a privacy ombudsman to monitor the sale process and ensure compliance with privacy policies related to the genetic material submitted by customers.
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