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Pre-Packaged Bankruptcy

A pre-packaged bankruptcy is one in which an agreement is reached between the debtor and most or all of its creditors about the debtor's Plan of Reorganization before the bankruptcy petition is filed with the Bankruptcy Court.  There can be significant cost savings to the debtor company by using this approach.   For example, the Plan can be confirmed quickly, even over the objections of a minority of the company's pre-petition creditors.  Also, the number of hearings  in the bankruptcy, as well as the number of objections filed by creditors will be lower than would be expected if the debtor had not solicited approval from its creditors before filing.

Edited by Michael C. Dennis.