prepackaged bankruptcy

(redirected from Prepackaged Bankruptcies)

Prepackaged bankruptcy

A bankruptcy in which a debtor and its creditors pre-negotiate a plan of reorganization and then file it along with the bankruptcy petition.

Prepackaged Bankruptcy

A situation whereby a company and its creditors agree on the terms of bankruptcy before it is filed with bankruptcy court. That is, the company and its creditors agree how and how much each creditor will be repaid and the terms of repayment. All parties, including shareholders if applicable, must agree to the prepackaged bankruptcy before it takes effect. A prepackaged bankruptcy makes it easier and less expensive for all parties when a company files Chapter 11 and reorganizes.

prepackaged bankruptcy

A Chapter 11 bankruptcy settlement in which the reorganization and main provisions have been agreed to by creditors and stockholders in advance of the filing.
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DENVER, March 4, 2013 /PRNewswire/ -- A new study conducted by claim and noticing agent UpShot Services LLC and research database firm Chapter 11 Dockets reveals that while prepackaged bankruptcies continue to get shorter, traditional, "free-fall" cases are, in fact, taking longer.
The reduced precision may be due to fewer observations of prepackaged bankruptcies.
There is a burgeoning effort by asbestos plaintiffs' counsel to induce companies to create prepackaged bankruptcies, often extracting extra fees for facilitating a settlement.
Prepackaged bankruptcies are a compromise between Chapter 11 and out-of-court reorganizations of debts in which an agreement is usually very difficult to reach (Anderson, 1990).
Among them are the SOP's applicability to entities emerging from chapter 11 that fail to meet fresh-start reporting criteria as well as to prepackaged bankruptcies.
2006 saw a total of ten prepackaged bankruptcies initiated; and 2005, 2004 and 2003 figures were 7, 14 and 21, respectively.
Those out-of-court services include prepackaged bankruptcies in which creditor approvals needed to restructure a company are obtained before a relatively abbreviated court process.
This paper examines the size and determinants of direct costs in a sample of 157 traditional Chapter 11s, prepackaged bankruptcies, and exchange offers over the period 1986 to 1993.
In general, prepackaged bankruptcies file a Plan of Reorganization and related Disclosure Statement along with a Chapter 11 petition.
With less financing available and Bankruptcy Code constraints, TMA leaders note a trend toward more prepackaged bankruptcies, Section 363 sales and liquidations.
The current trend suggests at least three alternatives for debt restructurings: Chapter 11 reorganizations, prepackaged bankruptcies, and workouts.
Neligan has more than 20 years of experience representing corporations in out-of-court restructurings, prepackaged bankruptcies and Chapter 11 reorganizations throughout the country.