Bankruptcy Terms and Definitions

Asset
An economic resource or item owned by a business that is expected to benefit its future operations.

Adequate protection
The right of a party with an interest in the debtor's property (such as a secured creditor) to assurance that its interest will not be diminished during the bankruptcy proceedings.

Liquidating reorganization
An informal term for a Chapter 11 proceeding when the company is essentially liquidated through one or more asset sales.

Straight bankruptcy
An informal term for a Chapter 7 bankruptcy or liquidation; used more commonly to describe liquidation before the Bankruptcy Reform Act of 1978.

Debtor-in-possession
The debtor which remains in control of operations; as opposed to having a trustee operate the company.

Voluntary bankruptcy
Bankruptcy filed by the debtor itself; data from the U.S. Administrative Office of the Courts subdivides bankruptcies into voluntary and involuntary.

Chapter Thirteen
Bankruptcy proceedings for an individual with the intention of rescheduling the individual's debt (rather than liquidating the individual's assets and debt; an individual files under Chapter 7 to liquidate);

Chapter Thirty Three
An unofficial term describing a company that has filed for Chapter 11 three times.

Core proceedings
Those proceedings that are inherent in and fundamental to the administration of a bankruptcy case.

Debtor
The entity seeking protection from creditors under the bankruptcy laws.