Reorganization Definition

Reorganization Definition

See Also:
Debtor in Possession
Financial Distress Costs

Reorganization Definition

Reorganization is when a bankrupt company restructures its debt obligations without going out of business. During reorganization, the debtor retains ownership of its assets and continues business operations. The debtor then renegotiates the terms of its debt obligations to creditors. If a company is having financial trouble and is at risk of defaulting on loan payments, that company may want to consider reorganization to consolidate debts and adjust loan agreements to make payments more manageable.

Reorganization vs Liquidation

Reorganization vs liquidation are two types of bankruptcy processes. In a reorganization, the debtor retains ownership of its assets and continues business operations while renegotiating debt repayments with creditors.
In a liquidation, the creditors seize control of the debtors assets and sell them to pay off the debt. Furthermore, the debtor goes out of business and ceases normal operations. After liquidation, the entity technically no longer exists.

Chapter 11 Reorganization

Chapter 11 bankruptcy is a type of bankruptcy proceeding outlined in the Bankruptcy Code. It is also a reorganization procedure.
When a financially distressed entity files for chapter 11 bankruptcy, the entity continues to operate while it restructures its debt obligations. The entity is given a limited amount of time in which to restructure the debts. During this time the entity is protected from creditors.
Reorganization bankruptcies are usually more complex than liquidation bankruptcies. Companies usually file for Chapter 11 bankruptcy.
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Reorganization Definition, Reorganization vs Liquidation

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Reorganization Definition, Reorganization vs Liquidation


Restructuring Expense

See Also: How to Estimate Expenses for an Annual Budget Administration Expenses Restructuring Expense Definition Restructuring expense is defined as the cost a company incurs during corporate restructuring. They are considered nonrecurring operating expenses and, if a company is undergoing restructuring, they show up as a line item on the income statement. Restructuring Charges Meaning

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Debt Restructuring

See Also: How to Keep Your Corporate Veil Closed Corporate Veil Bankruptcy Information Debtor in Possession Insolvency Mezzanine Debt Financing (Mezzanine Loans) Relationship With Your Lender Reorganization Debt Restructuring A company can fall into financial trouble for many different reasons. Often, the gut reaction of management is to file for Chapter 11 bankruptcy. In our

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