Capter 13 Research case 1

Capter 13 Research case 1 - to notify the SEC within...

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RE: Chapter 13 Research Case 1 Companies have a couple of options when its finances are in disarray. Bankruptcy is an option for corporations. Companies can fill a Chapter 7 or a Chapter 11 bankruptcy. The Securities and Exchange Commission (SEC) has guidelines for corporations when they are seeking these legal actions and are publicly held companies. The SEC website lists the differences between Chapter 7 and Chapter 11. Chapter 7 bankruptcy requires that all business practices stop. The business must then liquidate all of its assets and proceed with bankruptcy. All of the legal fees are paid first, then the secured creditors are then paid, and money left over is then paid to the remaining creditors. The creditors that are not paid will be group together and put into the bankruptcy. The lawyers will mail out to these creditors regarding the bankruptcy proceedings and the court date. Chapter 11 bankruptcy lets the business remain in business. When companies decided to file bankruptcy, that companies has
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Unformatted text preview: to notify the SEC within fifteen days on the “Form 8-K” . Companies have the option to go with “prepackaged bankruptcy plans” that have the approval of its creditors and stockholders . Under this plan all business decision are authorized by the court hearing the bankruptcy case. Companies also have the option of reorganization. When a company goes into bankruptcy, the website going into detail about the effects of bankruptcy has on bondholders, stockholders, and creditors. It also explains about creditor committees and the appointment of its members. How a reorganization plan is developed. Before the reorganization plan is approved it has to be voted on. Some companies can recover after bankruptcy and have a future fill of profits and better management. Some of these companies will just end up being liquated and close for good. Still some companies will be sold and merger with another company after it comes out of bankruptcy....
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This note was uploaded on 03/09/2012 for the course BUSI 400 taught by Professor E during the Spring '11 term at Lee.

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