Debt restructuring

A company with a cash flow crisis may have to re-negotiate or reschedule loans and other contractual agreements, raise additional share capital and sell assets in order to ensure survival. This is known as debt restructuring, even though it may involve equity. In the US, a corporation may voluntarily file for Chapter 11 protection, which freezes all outstanding financial claims and lawsuits against the company while it continues operating and reorganizes financially. The alternative might be forced or voluntary liquidation, which is what happens to erring companies in most other countries.

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