Business Report: How Chapter 11 works

Business Report: How Chapter 11 works

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

Copyright 2018 Hawaii News Now. All rights reserved.