A __________ protects an insolvent firm from creditors during a period of reorganization to restore profitability.
A) divestiture
B) downsizing
C) backward integration
D) chapter 11 bankruptcy

Question

Quizplus · Accepted Answer

Chapter 11 bankruptcy is a legal procedure that allows a company to restructure its debts and operations while continuing to operate the business. During this time, the company is protected from its creditors, allowing it to renegotiate contracts, reduce expenses, and reorganize its operations with the goal of restoring profitability. Divestiture, downsizing, and backward integration are not necessarily associated with bankruptcy or attempts to restore profitability.

A __________ Protects an Insolvent Firm from Creditors During a Period