What does the Chapter 11 plan of reorganization set forth?

Question

Quizplus · Accepted Answer

The Chapter 11 plan of reorganization sets forth a proposed new capital structure for a debtor to assume when it emerges from bankruptcy. It outlines how the debtor will restructure their business, pay off their debts, and distribute shares to creditors and shareholders. Option A and B are incorrect because they do not accurately reflect the purpose of a Chapter 11 plan of reorganization. Option C is partially correct but does not include the proposed new capital structure that is a key feature of the plan.

What Does the Chapter 11 Plan of Reorganization Set Forth