Liquidating Chapter 11

A Chapter 11 case whose purpose is (or becomes during its course) a liquidation rather than a reorganization of the debtor. A liquidating Chapter 11 is usually preferable to non-bankruptcy liquidation in that it is more orderly and occurs in one forum, preventing a haphazard dismemberment of the debtor due to multiple creditors racing to any number of courthouses, exercising their rights independently and without any coordination with each other or with the debtor.

Bankruptcy Code § 1129(a)(11). See also Liquidating Plan.

Synonym: “Trustee Avoidance Plan.”

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