Corporation Bankruptcy -- Chapter 7 and Chapter 11 for Corporations

Corporation Bankruptcy

Corporations can file Chapter 7 (liquidation) or Chapter 11 (reorganization) but NOT Chapter 13. Key differences from individual bankruptcy:

• No discharge: Corporations do not receive a discharge in Chapter 7. The entity is simply liquidated and ceases to exist.
• Chapter 11 discharge: A corporation can receive a discharge through a confirmed Chapter 11 plan, allowing it to continue operating.
• No exemptions: Corporations cannot claim exemptions. All corporate assets are available to creditors.
• Shareholder impact: In Chapter 7, shareholders lose their investment. In Chapter 11, equity may be wiped out under the absolute priority rule unless the plan provides otherwise.