Key Highlights
- When a company files for Chapter 11 bankruptcy protection, it risks losing control of its business.
- "A fundamental tenet of Chapter 11 is that current management continues to operate the company as the debtor in possession," wrote Lee Jason Goldberg for Weil Restructuring.
- He explained how a company could lose control of its business.
- "In overseeing the debtor in possession, the bankruptcy court ensures that the debtor in possession performs its fiduciary duties.
- Should the bankruptcy court become convinced that the debtor in possession is not performing its fiduciary duties, section 1104(a) of the Bankruptcy Code requires the bankruptcy court to appoint a chapter 11 trustee to operate the debtor’s business and manage its affairs," he wrote.
