The process of the reorganization of a
bankrupt company under the supervision of a court or the appropriate regulator. Chapter 11 proceedings require a
reorganization plan, which is filed with the bankruptcy court or regulator and describes how an
insolvent company will change structurally to help it
pay its
debts and stay in business. This plan is subject to court or regulator oversight to ensure enforcement. Depending upon the specific plan, a company's original owner or managers may maintain control. Other times, the company's
creditors become the new owners of the business; this especially happens when one or more creditors have had their
debt completely discharged. Changes also must occur structurally (perhaps in
risk management or
marketing or perhaps in something more fundamental) to ensure that the bankruptcy does not repeat itself.