Prepackaged bankruptcy
A U.S. Chapter 11 process in which a restructuring plan is negotiated and the requisite plan acceptances are solicited and obtained before filing under applicable legal requirements. Court confirmation and statutory protections still apply; negotiated support alone is not the same as a completed prepetition solicitation.
Prepackaged bankruptcy in practice
Hypothetical: a company negotiates a debt-for-equity plan, makes the required disclosures and solicits and obtains the requisite plan acceptances before filing. It then seeks court confirmation in Chapter 11. Advance agreement may shorten proceedings, but timing and confirmation are not guaranteed.
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| Stage | Requirement |
|---|---|
| Before filing | Negotiate plan, disclose and solicit votes under applicable law |
| Chapter 11 filing | Begin court proceedings |
| Confirmation process | Court assesses legal requirements and objections |
| Implementation | Proceed only as authorized |
Terms Related to Prepackaged bankruptcy
Chapter 11 bankruptcy · DIP financing · Fulcrum security · All of the glossary