LibGuides: Business Law: Bankruptcy/Restructuring

Bankruptcy in Business

Bankruptcy in Business

Bankruptcy is a legal process that allows businesses that are unable to meet their financial obligations to seek relief from some or all of their debts. In the business context, bankruptcy serves as a structured mechanism for dealing with insolvency, balancing the interests of debtors and creditors while providing an orderly way to either reorganize or liquidate a company’s assets.

Under U.S. Bankruptcy Code, the most common forms of business bankruptcy are Chapter 7 and Chapter 11:

Chapter 7 involves the liquidation of a company’s assets to repay creditors, often resulting in the closing of the business.
Chapter 11 allows a business to restructure its debts and operations, continuing to operate while supervised by a bankruptcy court and often involving negotiations with creditors to reduce or reschedule debt payments.

Bankruptcy plays a critical role in the economy by offering a safety net for struggling businesses and a framework for fair treatment of creditors. However, filing for bankruptcy carries significant legal, financial, and reputational consequences. Business owners must carefully weigh the legal implications and consult with bankruptcy attorneys before proceeding, as mismanagement of the process can lead to personal liability or loss of business control.

Bankruptcy 101

Bloomberg Law
Bloomberg law includes a practice section of business bankruptcy including treatises and checklists.

This subscription is available by login and password and limited to College of Law students and Faculty. To obtain login credentials, go to https://profile.bna.com/bloomberglaw-activate/ Limited access is also available on-campus.

Bankruptcy 101
Bankruptcy Basics for businesses provided by the Federal Courts

Elements of Bankruptcy, 6th by Douglas Baird
ISBN: 9781609303549

Publication Date: 2014-07-14

Widely cited and authoritative, Elements of Bankruptcy provides a comprehensive introduction to the basic principles of bankruptcy law. In addition to covering foundational questions such as the fresh start for individuals, property of the estate, executory contracts, adequate protection, preferences, and fraudulent conveyances, this book also covers such cutting-edge issues such as debtor-in-possession financing, plan support agreements, carve-outs, credit-bidding, and first-day orders. The sixth edition also takes stock of the developments in bankruptcy in the wake of the 2008 financial crisis, including the rise of municipal bankruptcies in Detroit and elsewhere, as well as developments from the Supreme Court, including the fallout from Stern v. Marshall and Executive Benefits Insurance Agency v. Arkison.
Bankruptcy in a Nutshell by David Epstein
Call Number: KF1501 .Z9 E67 2021

This classic student text, used by tens of thousands of law students for almost 50 years, has been revised to reflect changes in the Bankruptcy Code, changes in case law, changes in bankruptcy practices, and changes in bankruptcy casebooks. For example, there is a Chapter on new Subdivision V which affects most small business cases and a new separate Chapter on Section 363 Sales which affects most large business cases. Today's bankruptcy courses are now much more than just the avoiding powers, and discharge. As bankruptcy classes have become more comprehensive, students have found this short book even more helpful in comprehending reading assignments, contributing to class discussions, and answering exam questions.

Bankruptcy Law
by Tina Xiang Last Updated Oct 17, 2025 296 views this year