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Business Report: How Chapter 11 works

With Sears filing for Chapter 11, I thought we might go over this.
It changes how a company is...
With Sears filing for Chapter 11, I thought we might go over this. It changes how a company is run. Not in Ch. 11 – In Ch. 11 CEO works for shareholders – Judge is CEO, works for creditors CEO constrained by SEC regulations – Judge has broad powers CEO can choose who gets paid first – Judge constrained by pecking order Vendors can demand cash, cut off service – Judge can demand service Shareholders own company – Creditors can wind up owning company
Published: Oct. 15, 2018 at 10:43 AM HST
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HONOLULU (HawaiiNewsNow) - With Sears filing for Chapter 11, I thought we might go over this.

It changes how a company is run.

Not in Ch. 11 – In Ch. 11

CEO works for shareholders – Judge is CEO, works for creditors

CEO constrained by SEC regulations – Judge has broad powers

CEO can choose who gets paid first – Judge constrained by pecking order

Vendors can demand cash, cut off service – Judge can demand service

Shareholders own company – Creditors can wind up owning company

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