Chapter 11 of the Bankruptcy Code generally provides for reorganization—usually of a corporation or partnership. A chapter 11 debtor (bankrupt entity) usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in a chapter 11 bankruptcy filing.
In South Dakota, as in all states, Chapter 11 of the Bankruptcy Code is a federal law that allows for the reorganization of a debtor's business affairs, debts, and assets. It is typically used by corporations, partnerships, and occasionally by individuals with substantial debts and assets. Under Chapter 11, a debtor usually proposes a plan of reorganization to maintain business operations while paying creditors over a period of time. The debtor has the exclusive right to propose a plan of reorganization for the first 120 days after the petition is filed. The plan must be accepted by the creditors and approved by the court. If the plan is confirmed, the debtor can continue to operate the business and work to repay creditors according to the terms of the reorganization plan. It's important to note that while Chapter 11 is governed by federal law, local rules and procedures can vary, and an attorney experienced in South Dakota bankruptcy law would be able to provide guidance specific to the state.