Prepackaged Bankruptcy

AAA

DEFINITION of 'Prepackaged Bankruptcy'

A plan for financial reorganization that a company prepares in cooperation with its creditors that will take effect once the company enters bankruptcy. This plan must be voted on by shareholders before the company files its petition for bankruptcy, and can result in shorter turnaround times.

INVESTOPEDIA EXPLAINS 'Prepackaged Bankruptcy'

The idea behind a prepackaged bankruptcy plan is to shorten and simplify the bankruptcy process in order to save the company money in legal and accounting fees, as well as the amount of time spent in bankruptcy protection. The sooner the company can emerge from bankruptcy, the sooner it can implement its reorganization and return to generating revenues from its core operations.

RELATED TERMS
  1. Discharge In Bankruptcy

    A permanent order that releases the debtor from personal liability ...
  2. Chapter 15

    A chapter under the U.S. Bankruptcy Code, added to foster a cooperative ...
  3. Cramdown

    A bankruptcy concept that is often employed to obtain a Chapter ...
  4. Absolute Priority

    A rule that stipulates the order of payment - creditors before ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  6. Chapter 11

    Named after the U.S. bankruptcy code 11, Chapter 11 is a form ...
Related Articles
  1. Bankruptcy Protection For Your Accounts
    Retirement

    Bankruptcy Protection For Your Accounts

  2. Common Clues Of Financial Statement ...
    Retirement

    Common Clues Of Financial Statement ...

  3. An Overview Of Corporate Bankruptcy
    Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

  4. What are the differences between chapter ...
    Entrepreneurship

    What are the differences between chapter ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center