Chapter 11

Formal

A section of the US bankruptcy code that details procedures allowing companies to reorganise their businesses when faced with crippling debt. Management continues to run the day-to-day business operations but all significant business decisions must be approved by a bankruptcy court.

Real-world Example

A struggling US airline files for Chapter 11 bankruptcy protection, allowing it to keep operating while it restructures its debts and renegotiates contracts with lessors and unions.