Lesson: Chapter 11 Bankruptcy

In this lesson, Nick Palazzolo, CPA, demystifies Chapter 11 bankruptcy, guiding viewers through the crucial aspects of the reorganization process for struggling businesses. He uses relatable examples like Toys R Us to illustrate how companies can restructure debts and operations to regain profitability while continuing to function. He clarifies who can file for Chapter 11, the intricacies of voluntary versus involuntary filings, and the formation of creditor committees. Nick outlines the debtor's rights, the process to develop a reorganization plan, and details the various considerations such as the involvement of trustees, confirmation criteria for the plan, and the critical role of the court and committees in the bankruptcy proceedings. By familiarizing with the confirmation process, including cram downs and the binding effect of the approved plan, this lesson ensures a comprehensive understanding of the Chapter 11 path to recovery.