Which of the following could be true of the proceedings under Chapter 11 of the Bankruptcy Code?
A)They are always administered by the bankruptcy courts.
B)The debtor's assets are sold and its liabilities extinguished.
C)The company does not operate during this period.
D)The debtor continues as a business after the reorganization.

Question

Quizplus · Accepted Answer

Chapter 11 allows companies to reorganize and continue operating while they work out a plan to pay off their debts. Therefore, the debtor can continue as a business after the reorganization. Option A is not always true as proceedings may be administered by a trustee or examiner. Option B is not true as the debtor's assets may be restructured, not necessarily sold, and its liabilities are typically reorganized rather than extinguished. Option C is not true, as the company typically operates during this period, subject to court supervision.

Which of the Following Could Be True of the Proceedings