Respuesta :
The correct answer to the given question is option 2) The provisions of Chapter 11 apply to people who want to reorganize.
Since Chapter 11 involves reorganizing a debtor's financial affairs, responsibilities, and assets, it is known as a "reorganization" bankruptcy. Small businesses are "defined as entities with less than around $2.7 million in debts that also meet other qualifications," according to the U.S. Department of Justice, and the Small Business Reorganization Act of 2019 introduces a new subchapter V to Chapter 11 to make bankruptcy for them simpler.
A private trustee who will collaborate with the small business debtor and its creditors to facilitate the development of a consensual plan of reorganization is provided for under the law, which "imposes shorter deadlines for concluding the bankruptcy process, allows for greater flexibility in negotiating restructuring plans with creditors."
Question
when you advise Fred that he should consider filing for chapter 11 relief in bankruptcy court on behalf of friendly foam, he asks why that fits the situation best. how should you answer him?
Option
1) Chapter 11 applies to individuals seeking liquidation
2) Chapter 11 applies to individuals seeking reorganization.
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