It is protection from creditors. A judge will decide which bills they can pay to stay in business and what assets they can sell and under what terms.
Common stock is probably worthless and secured creditors will get some percentage of their loan back. The hope is the company can re-organize when relieved of debts they can't pay and creditors will get back more money than they would if they forced the company to close and auction off the assets.
Common stock is probably worthless and secured creditors will get some percentage of their loan back. The hope is the company can re-organize when relieved of debts they can't pay and creditors will get back more money than they would if they forced the company to close and auction off the assets.
thankfully Wikipedia is back: http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_St...