In Chapter 11, the court has two mechanisms to implement an optimal bankruptcy outcome:

Question

Quizplus · Accepted Answer

In Chapter 11 bankruptcy proceedings, the court can ensure an optimal outcome through two main mechanisms: imposing restrictions on bargaining between claimants to prevent any unfair advantage or collusion, and the use of a restricted auction to ensure the assets of the bankrupt entity are sold at the best possible price under controlled conditions.

In Chapter 11, the Court Has Two Mechanisms to Implement