X in Bankruptcy is for (Old) Chapter X

3356289385_aee9478f7d_t[1]  Brings the Series to an End (See Below)

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com

Website: westchesterbankruptcyattorney.org

What X Was:

You have heard of Chapter 11 right?  Everybody has.  But how about Chapter 10?  Ever heard of that?  Well, here is a bit of history:

Chapter X was a portion of the bankruptcy code that dictated bankruptcy processes and procedures for corporations. 1978 was the last year corporations were able to file bankruptcy under Chapter X

Chapter X, (or “Chapter Ten”) was originally introduced in the Bankruptcy Act of 1898. Chapter X was used as a blueprint for the reorganization of financially unhealthy corporations under which  a company would have to present full disclosure of current financial conditions to the court for review. Along with working in cooperation with the courts, the company would have to be be willing to develop a debt reorganization plan that would allow for the orderly retirement of its current outstanding debt. If the court found that the company met the qualifications for a Chapter 10 and that the reorganization plan was workable, the court would grant the protection and a appoint a manager for the plan. The court-appointed manager was to serve as an ongoing liaison between the court  and the debtor company.

Chapter X was a notoriously complex procedure, and was seldom used during its time.  Most corporations instead opted to file Chapter XI (the Chapter 11  of that time) because it did not displace the company’s management with a court appointed manager and gave management more control over reorganization. Chapter XI was also more popular because it gave corporations more control over how and to what extent the company would repay creditors and liquidate assets.

Why X Matters Today:

Though Chapter X was removed in 1978 under the Bankruptcy Reform Act, its ideas were revised and combined with Chapter XI and other bankruptcy laws to create today’s Chapter 11.  One of the most important of these concepts which pervades the modern Bankruptcy Code was that of “disinterestedness”, which meant that as a condition of employment, trustees and court-appointed professionals were not allowed to have a personal interest in the outcome of the cases.

Note: This completes the 24th and final letter in the ABC’s of bankruptcy which I commenced with the letter C on November 22, 2011,  Who would have thought it would take me a year to get through the alphabet once?

I dedicate this final blog in the series to my son Ethan Forrest Carr, whose 16th birthday it is today! Congratulations, Ethan!

©Christopher C. Carr, Attorney at Law 2009, 2012. All Rights Reserved

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  


I also provide Mortgage Modification Services.

Other lawyers blogging “X” include:

Photo by takomabiblilot

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s