THE PROCESS OF U.S. BANKRUPTCY REORGANIZATION. (CHAPTER ELEVEN OF THE U. S. CODE). COMPARISON WITH OUT-OF-COURT RESTRUCTURINGS

This paper examines a part of the Bankruptcy law of the United States which deals with preventive solutions from liquidation in that country, which aims to preserve and virtually save the company in its economic and legal entity and is known by the name of its respective chapter, the Chapter Eleven of the Tide Eleven of the United States Bankruptcy Code, a federal bankruptcy rule that includes many institutions in its various chapters. The Chapter Eleven establishes an insolvency process of "Reorganization" of the company in crisis ("Reorganization Procedure") in order to solve the economic or financial distress and keep the business alive and so prevent it from its compulsory liquidation, formal ultimate solution regulated in Chapter Seven of the federal Bankruptcy Code. This paper is a comparison between of Chapter Eleven and Out of Court processes of business reorganization and restructuring of debt in the United States. This work addresses the alternative choice of one of both procedures, their advantages and disadvantages, the different local (nonfederal) procedures of debt restructuring, the management of the company in crisis, the negotiations with major lenders, the negotiation with small creditors and the use of special financial techniques of the debtor. In the final part of the paper the author makes a critical evaluation of the analized institutions.