Legal Definitions - reorganization plan

A reorganization plan is a proposal submitted by a corporation to the court for approval during a Chapter 11bankruptcy case. The plan outlines how the company will restructure its operations and finances to become profitable again.

• A struggling retail company files for Chapter 11 bankruptcy and submits a reorganization plan to the court. The plan includes closing unprofitable stores, renegotiating leases, and focusing on online sales to improve profitability.
• A manufacturing company files for Chapter 11 bankruptcy and submits a reorganization plan to the court. The plan includes reducing overhead costs, streamlining production processes, and investing in new technology to increase efficiency.

These examples illustrate how a reorganization plan is a roadmap for a company to get back on track financially. By identifying areas of weakness and implementing changes, the company can emerge from bankruptcy as a stronger and more profitable entity.