Question about chapter 11 ....
 

I have no idea how thsi stuff works, but tryign to clear up a question someone made in a discussion im having :

situation is this:

Organisation is being sued for orginal claim of $400 Million
so the organisation filed for chapter 11.


now someone is saying someone else said (you know how the chinese whipser works)
that unless the organisation comes up with $15 million the whole deal is off and claimants can go for the original $400 million

does this sound correct?

chapter 11 is bankruptcy I am pretty sure

well i thought if you were bankrupt it meant you dont have to pay shit
liek isn't that the whole point of bankruptcy?

thats how it works out here in oz

in many places u do have to have $ to file for chaper 11 (bankrupt) here it would cost ya bout 2k+ to do it..

funny u need money to be broke..

chapter 11 is reorganization, the company plans to emerge from bankruptcy

chapter 7 is full blown banruptcy

Even if you declare bankruptcy in AU you are still obligated to (partially) cover your debts once you're back on your feet... it doesn't just automatically release you from all financial responsibility. I came pretty close to it a few years ago with a failing business I should have closed long before I did, but decided against bankruptcy. I'm glad I did since my credit record remains untarnished. I don't think we'd be building a home if it had a bankruptcy listed. :)

Thankyou! that answers it

When I owned my machine shop business (I was sole owner) had to file chapter 11. I beleive a big business such as exe: AT&T or Amtrack, etc etc. Any business that trades on whatever stock market, they have to file for chapter 7. Or a Corporation that has a board of executives that have a percentage in the Corporation/business.


Also if you owe the IRS or State board of equalization (California State taxes) you would have to work out an offer & compromise.