Who operates the business and develops a plan of reorganization in Chapter 11 bankruptcies?

Question

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In Chapter 11 bankruptcies, the debtor in possession operates the business and develops a plan of reorganization, with court oversight. This is different from Chapter 7 bankruptcies, where a trustee is appointed to liquidate the assets and distribute them to the creditors. The creditors' committee may provide input and negotiate with the debtor in possession, but they do not operate the business or develop the plan themselves. State courts are generally not involved in bankruptcy proceedings, as bankruptcy law is federal.

Who Operates the Business and Develops a Plan of Reorganization