Explain the salient features of Chapter 11 dealing with the US Bankruptcy Code.

Chapter 11 of the US Bankruptcy Code deals with reorganization, primarily for businesses, but also for individuals with substantial debts. Its salient features are: Reorganization, Not Liquidation: Chapter 11 is not a declaration of insolvency leading to immediate liquidation. Companies file Chapter 11 to continue operating and to take the necessary steps to emerge as a financially stronger business, reorganizing their operations or balance sheet, or in some cases by selling substantially all its assets. Debtor in Possession (DIP): Management typically remains in control of the business during the Chapter 11 rehabilitative process. This is known as 'Debtor in Possession' (DIP), meaning the existing management continues to run the company's day-to-day operations, albeit under court supervision. No Automatic Appointment of Trustee: Unlike Chapter 7 (liquidation), trustees, administrators, or monitors are typically not appointed in Chapter 11 unless there is evidence of fraud, dishonesty, or gross mismanagement by the existing management. Business Continuity: Chapter 11 normally does not cause an interruption to business operations. The company continues to function, serving customers and employing staff, which helps preserve its value. Automatic Stay: The company is given breathing room during the process through an 'automatic stay'. This generally prevents parties from taking legal action against the company or taking the company's assets, providing a temporary shield from creditors while the reorganization plan is developed. Rehabilitation Focus: Most publicly-held companies prefer to file under Chapter 11 rather than Chapter 7 because they can still run their business and control the bankruptcy process. Chapter 11 provides a structured process for rehabilitating the business of the company, allowing it to restructure its debts and operations. Plan of Reorganization: The core of Chapter 11 is the development and confirmation of a plan of reorganization, which outlines how the debtor will repay its creditors over time and how the business will operate going forward. This plan must be approved by creditors and the bankruptcy court.