Involuntary bankruptcy occurs when creditors force a debtor into bankruptcy proceedings, typically under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.
Prepackaged bankruptcy under Chapter 11 involves a pre-negotiated agreement between creditors and the debtor regarding the terms of reorganization before filing for bankruptcy.
Reorganization refers to the financial and structural overhaul of a company to restore profitability and operational efficiency. It commonly occurs in both legal and managerial contexts and can involve financial restructuring, changes in lines of authority, and adjustments to organization charts.
