American Airlines' parent company AMR Corporation filed for Chapter 11 bankruptcy in late 2011 in the hopes of reorganizing its debts, ditching some obligations, and putting itself in a strong position for future profitability. Last year, US Airways Group, Inc., indicated it was interested in merging with American, which would have to be approved by the bankruptcy court.
Corporate restructuring professionals -- who provide non-legal services in corporate restructuring, turnaround management, and bankruptcy reorganization to mid- and large-size companies -- can be an amusing and optimistic bunch. A survey of about 100 restructuring professionals was just released, checking in on their sense of where the economy is headed for big corporations in the year ahead. Amusingly, they were also asked to choose a movie that reflected their outlook for the year.
Under a Chapter 11 Bankruptcy a corporate (or individual) debtor can restructure its business operations, continue to operate a business and reorganize its financial affairs. The reorganizations process is achieved by filing a plan and disclosure statement and getting them confirmed through the Bankruptcy Court. The goal being to that the business would continue to operate, provide jobs, satisfy creditors and produce a return for the owners.
A Chapter 11 Bankruptcy usually allows a debtor to continue business operations while attempting to reorganize the debtors debts at the same time. This makes headlines when an organizations such as Crystal Cathedral, United Airlines, Lehman Brothers or General Motors files for Chapter 11 protection. But it is just as applicable for a corner gas station, a pizza parlor, or any other business. If the Debtor is a legitimate and operating commercial enterprise of any type, it may benefit from a Chapter 11 filing.