Which of the following is a feature of the Chapter 11 plan of reorganization?
A)an equilateral division of the Chapter 11 estate among all creditors
B)division of the bankruptcy estate according to the debt to be paid to each creditor
C)discharge of a debtor's unsecured debts and payment of secured debts
D)a proposed new capital structure for a debtor to assume when it emerges from Chapter 11 bankruptcy

Question

Quizplus · Accepted Answer

A Chapter 11 plan of reorganization typically proposes a new capital structure for the debtor to assume when it emerges from bankruptcy. This may involve a reduction in debt, issuance of new securities, or other changes to the company's capital structure. Options A and B are not accurate descriptions of a Chapter 11 plan, as they do not reflect the reality of the bankruptcy process. Option C refers to a possible outcome of a Chapter 11 case, but is not a feature of the plan itself.

Which of the Following Is a Feature of the Chapter