A voluntary reorganization of debts whereby a firm's debt obligations are still expected to be paid in full but at a later than originally scheduled date,is called

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An extension refers to a voluntary reorganization of debts wherein a firm's debt obligations are still expected to be paid in full, but at a later date than originally scheduled. This allows the firm more time to generate cash flows to meet its debt obligations. A composition, on the other hand, is a voluntary agreement between a debtor and its creditors to settle debts for less than the full amount owed. Creditor control refers to a situation where a distressed firm's creditors take control of the firm's operations to ensure their debts are repaid.

A Voluntary Reorganization of Debts Whereby a Firm's Debt Obligations