Reorganization

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Reorganization

Creation of a plan to restructure a debtor's business and restore its financial health.

Reorganization

The act or process of changing the terms on the assets and/or liabilities of a company. That is, a company may consolidate its debts, significantly change the size and scope of its operations, and take other measures to reduce the strain of continuing operations. Most companies reorganize either as part of a bankruptcy or as an effort to avoid it. If the company is reorganizing as part of a corporate bankruptcy, it is said to be in receivership.

reorganization

The restatement of assets to current market value along with a restructuring of liabilities and equity to reflect the reduction in asset values and negotiations with creditors. Reorganization is used as an attempt to keep a financially troubled or bankrupt firm viable. See also Chapter 11.