Chapter 11 cases are filed for many reasons. One reason is a for an individual or business reorganization. Another possible reason is for a business liquidation. Why would a Chapter 11 case be used for a liquidation, when Chapter 7 already is available for that purpose? The reasons are many. In most situations, more value will be gained when the business is “wound down” by the owner gradually over time, rather than sold at “firesale” prices by a Chapter 7 trustee.
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