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FAQ / What happens if a chapter 11 plan is not successful?Prior to the closing of a case, the failure of a confirmed chapter 11 plan could result in the conversion of the case to a case under chapter 7 or the dismissal of the case altogether. If, after a plan is confirmed and the case is closed, the debtor defaults in its obligations under the plan, aggrieved parties could, depending on the circumstances, either petition the bankruptcy court for appropriate relief or initiate an action for breach of contract in another court of competent jurisdiction. If, after the cased is closed, the plan simply fails to produce the anticipated results and the debtor experiences continued or additional financial difficulties, the debtor would have all of the same options available to any company facing insolvency or similar problems, i.e., liquidating or undergoing further restructuring inside or outside of another bankruptcy proceeding. |
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