prepack. Method of filing for company reorganization under Chapter 11 that is relatively cheaper, quicker, and more risk-free and hassle-free. It short-circuits the normal bankruptcy filing and out-of-court workout procedures. In a prepack, the management of the failed company negotiates with its major creditors the general terms of its bankruptcy plan and, after taking their and two-thirds of its shareholders' consent, files the plan with the bankruptcy petition. Employed usually when the significant creditors are few and the company is free from heavy contingent or disputed liabilities, it might take only 30 to 90 days instead of years to go into reorganization and come out clean. Creditors normally agree to a prepack because they can recover more in this scheme than in a liquidation, and their claims are preserved and not washed out as in other types of bankruptcies. The management is usually allowed to retain an equity stake in the reorganized company and there may be associated tax benefits.
Related information about prepackaged bankruptcy:
- Prepackaged Bankruptcy Definition | Investopedia
A plan for financial reorganization that a company prepares in cooperation with its creditors that will take effect once the company enters bankruptcy. This plan ...
- Increase in Prepackaged Bankruptcies Likely to Continue ...
Oct 15, 2010 ... In a prepackaged bankruptcy, or prepack, the plan of reorganization has been voted on and accepted by the classes of impaired creditors prior ...
- What is prepackaged bankruptcy? definition and meaning
Definition of prepackaged bankruptcy: prepack. Method of filing for company reorganization under Chapter 11 that is relatively cheaper, quicker, and more ...
- Chapter 5: Prepackaged Bankruptcy Cases
Sep 15, 2010 ... A prepackaged bankruptcy is an effective tool for implementing a ... Chapter 5 examines all aspects of prepackaged bankruptcy cases.
- Dewey & LeBoeuf Said to Consider Prepackaged Bankruptcy ...
Apr 20, 2012 ... Dewey & LeBoeuf is said to be contemplating a prearranged bankruptcy filing, in which the ailing law firm would reach an agreement with its ...
- HMH Restructuring Debt, Will File Prepackaged Bankruptcy
May 11, 2012 ... Houghton Mifflin Harcourt, still struggling with a heavy debt burden despite an earlier capital restructuring, is once again looking to rework its ...
- Prepackaged Bankruptcy - Financial Dictionary - The Free Dictionary
A bankruptcy in which a debtor and its creditors pre-negotiate a plan of reorganization and then file it along with the bankruptcy petition.
- Prepackaged Bankruptcy Definition & Example | InvestingAnswers
We explain the definition of Prepackaged Bankruptcy, provide a clear example of how it works and explain why it's an important concept in business, finance ...