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Bankrupt Entity is Considered Legally as a
"New Entity."
Once a bankruptcy petition is filed, the
"bankrupt" is legally considered a juridical entity separate from the
entity prior to the petition. The rights and obligations of the creditors are
subject to priorities, rejection, avoidance and prioritization. Of equal
importance is the fact that bankruptcy laws lead the customer and services
provider into uncharted waters, piloted by a judge. The original bargain is
undone. In Chapter 11, a plan of reorganization can be adopted and judicially
confirmed to avoid Chapter 7, liquidation.
Related topics:
Bankruptcy in Outsourcing
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