There are many reasons why a company might be experiencing financial distress, including overwhelming debt, cash flow problems, substantial litigation claims, and/or economic downturn. Companies sometimes use Chapter 11 as a vehicle to address these issues, especially since Chapter 11 allows the company to reorganize and continue as a going concern. However, Chapter 11 is an expensive process and may not be the best option for a financially distressed company.

This article discusses alternatives to Chapter 11 and how these alternatives may affect creditors. To access this article and read other insights from our Creditor’s Rights Toolkit, please click here.