1. Bankruptcy Jing Zhang

2. Reasons of Bankruptcy Balance Sheet Asset Equity Liability Asset= Liability + Equity

3. Reasons of Bankruptcy O Individuals: O Held Creditors O In Finance Distress O Companies O Getting Finance Distress O Voluntary & Involuntary ‘Discharge of Debts!’

4. Ways of Bankruptcy O Chapter 7: Liquidation O Chapter 11: Reorganization (usually companies) O Chapter 13: Adjustment of Debts of an Individual With Regular Income

5. Chapter 7 O ‘The chapter of the Bankruptcy Code providing for "liquidation," ( i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.)’ O Eligibility (Individual)

6. Chapter 13 O ‘The chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)’

7. Chapter 11 O ‘The chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership.’

8. Process of Chapter 11 O Filing Bankruptcy to a Court O Debtor in possession or trustee O Creditor Committee O A plan of reorganization within 120 days O Accept/ Reject the plan O Approval from Court O New company

9. How many companies filed Chapter 11 from 1997 to 2007 O Over 2000 O 1500~2000 O 1000~1500 O Less than 1000

10. How many of them successfully emerged? O Over 300 O 250~300 O 200~250 O Less than 200

11. Summary Cannot Payoff Debts Filing Bankruptcy Involuntary Petition Chapter 7 Liquidation Chapter 11 Reorganization Company ‘ Dead ’ Reorganization Plan Reject Plan Accept Plan New Company New Plan

12. Questions? Thank You

13. Reference O EISENBACH, B. (2012, 05 24). Forced into bankruptcy: The involuntary bankruptcy process. Retrieved from http://bankruptcy.cooley.com/2012/05/articles/business-bankruptcy- issues/forced-into-bankruptcy-the-involuntary-bankruptcy-process/ O Liquidation under the bankruptcy code. (n.d.). Retrieved from http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Ch apter7.aspx O The bankruptcy process step-by-step. (n.d.). Retrieved from http://www.bankruptcylawhelp.com/Bankruptcy/Bankruptcy-Process.aspx O Reorganization under the bankruptcy code. (n.d.). Retrieved from http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Ch apter11.aspx O Individual debt adjustment. (n.d.). Retrieved from http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Ch apter13.aspx O U.S. Code Title 11 O “Emerging from Bankruptcy with When-Issued Trading,” Raymond M. Brooks and J. Jimmy Yang Financial review (The), vol.47, pp. 445-467, (August 2012).