At the heart of Chapter 11 bankruptcy is the reorganization plan. A reorganization plan lays out the classification of claims and then specifies how each claim is going to be treated under the reorganization plan. Where the claim is impaired -- that is, the creditor will be paid less than the full value of their claim under the plan -- the creditor votes on the plan through a ballot. The ballots are collected by the court and tallied, and the court conducts a confirmation hearing to determine whether the plan should be approved or not after all the necessary documents are filed.
The biggest benefit of Chapter 11 bankruptcy for business owners is that the business can stay alive and running, and creditors are paid back over time. Accordingly, Los Angeles residents might then want to know when the debtor's debts are discharged.