In a Chapter 11 bankruptcy, the individual or business filing bankruptcy (debtor) has the first opportunity to propose a reorganization plan—to reorganize the debtor’s operations and payment of debts. A Chapter 11 plan is an agreement between the debtor and its creditors as to how the debtor will operate and pay its debts going forward.

Chapter 11 plans often include downsizing of the debtor’s operations to reduce expenses, and renegotiation of debts. If the proposed reorganization plan is accepted by the court and the creditors, the bankruptcy process moves forward.

In Vermont, as in other states, Chapter 11 bankruptcy is governed by federal law under the United States Bankruptcy Code. This type of bankruptcy is designed for the reorganization of businesses or individuals with significant debts and assets. The debtor in a Chapter 11 case has the exclusive right for a certain period to propose a reorganization plan, which details how the business will continue to operate and how debts will be repaid. This plan may include strategies such as downsizing operations to cut costs or renegotiating debts with creditors. Creditors may vote on the plan, and if it garners enough support, the bankruptcy court will need to confirm the plan. If the plan is confirmed by the court and accepted by the creditors, the debtor can proceed with the reorganization under the terms of the plan. It's important to note that while the process is governed by federal law, local rules and the specific practices of the bankruptcy court in Vermont can also affect the proceedings.