Chapter11 applies to partnerships, corporations, sole traders, and even municipalities in financial difficulties.
### What statute does Chapter 11 bankruptcy fall under?
- [ ] The Gladiators’ Financial Survival Guide
- [x] Bankruptcy Reform Act of 1978
- [ ] The CEO's Handbook for Financial Fitness
- [ ] TurboTax® 2000
> **Explanation:** Chapter 11 is part of the Bankruptcy Reform Act of 1978; it provides for business reorganization with the debtor staying in control.
### Which term refers to the debtor staying in control during the Chapter 11 process?
- [ ] Debtor in Denial
- [ ] Captain Creditor
- [x] Debtor in Possession
- [ ] Bankruptcy Boss
> **Explanation:** The term ‘Debtor in Possession’ allows the debtor to continue operating the business under court supervision while concocting a debt restructuring plan.
### What is the main difference between Chapter 7 and Chapter 11?
- [x] Chapter 7 involves liquidation, whereas Chapter 11 involves reorganization.
- [ ] Chapter 7 is personal, Chapter 11 is for businesses.
- [ ] Chapter 7 is geared towards rebuilding, Chapter 11 dissolves assets.
- [ ] None of the above
> **Explanation:** In Chapter 7, assets are liquidated to pay off debts, whereas, in Chapter 11, businesses reorganize their debts while under operational control.
### Which part of the business typically stays the same during a Chapter 11 reorganization?
- [ ] CEO's vacation home
- [ ] Debt amounts
- [x] Operational control
- [ ] Office décor
> **Explanation:** In Chapter 11 bankruptcy, the Debtor in Possession maintains operational control, though changes in debt structure, payments, and even personnel may occur.
### What is often negotiated with creditors during Chapter 11?
- [ ] Cafeteria menu
- [x] Rescheduled payment plans
- [ ] Corporate colors
- [ ] Staff uniforms
> **Explanation:** Payment plans and terms are often rescheduled or restructured during Chapter 11 to provide a feasible plan for both the debtor and creditors.
### Who supervises the business operations during Chapter 11?
- [x] The Court
- [ ] Guardian Angel
- [ ] The CEO’s Pet Cat
- [ ] IRS
> **Explanation:** The court supervises the ongoing operations during Chapter 11 to ensure proper management and adherence to the reorganization plan.
### Which businesses can use Chapter 11 for reorganization?
- [ ] Only partnerships
- [ ] Only corporations
- [ ] Both partnerships and sole traders
- [ ] All of the above
- [ ] correct_answer:
- [ ] content]
- [ ] correct_answer
- [ ] All of the above
- [ ] Chapter explanation
> **Explanation:** null
