There are a variety of different types of chapter 11 cases. Often, a company will have prenegotiated the terms of its restructuring prior to the commencement of its chapter 11 case, and in certain case may have even solicited votes for its plan. A prenegotiated bankruptcy is often referred to as “prearranged” or “prepackaged.”
In other situations the company may not be able to reorganize but is instead looking to sell its business. Chapter 11 may still be a useful tool to pursue this strategy. Distressed companies looking to sell their assets may also prenegotiate the sale of the company before filing Chapter 11 and then file to obtain court approval of the sale under Bankruptcy Code section 363. These types of Chapter 11 cases are referred to “363s” or “sale cases.” Recent examples include A123, the electric car battery maker.