Chapter 10

DEFINITION of 'Chapter 10'

A type of corporate bankruptcy filing in the U.S. Chapter 10 bankruptcy is restricted to corporate debtors, and is intended for situations where a major restructuring or reorganization is necessary. However, it is not available in cases where a Chapter 11 bankruptcy filing would suffice.

BREAKING DOWN 'Chapter 10'

In a Chapter 10 bankruptcy, management is displaced, and a court-appointed manager or trustee oversees the reorganization or restructuring process. This is generally not the case in a Chapter 11 filing. As well, because it is relatively simpler, a Chapter 11 bankruptcy filing is preferred over a Chapter 10 by debtors and their lawyers, and creditors.

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