What are alternatives to chapter 11?
- Out of court workout. Possible benefits of a workout include the time, expense and scrutiny of chapter 11. Possible downsides include hold out creditors, lack of court protection and the debtor’s inability to extract sufficiently favorable concessions from creditors.
- Chapter 7 bankruptcy. The debtor’s assets are turned over to a trustee for liquidation and distribution.
- Receivership. A receiver is appointed pursuant to state or federal law.
- Dissolution. Under North Carolina General Statutes chapter 55, a corporation may dissolve itself, liquidate its assets and distribute funds to its creditors.
- Assignment for the benefit of creditors. Under North Carolina General Statutes chapter 23, a debtor can assign its assets to a trustee who marshals and distributes assets in a priority scheme.