Explain reorganization (in bankruptcy)
Reorganization:
Reorganization is a process where the companies would make some changes in their internal structure. Companies may go in for reorganization for various reasons like for cost cutting, if in case company is dealing with merger or acquisition then it may make some internal changes, for improving efficiency in operations etc.
Bankruptcy : This is a legal declaration that a company has become insolvent & is unable to pay off its debts to its creditors. The company becoming bankrupt would file the bankruptcy declaration in the court & in some cases creditors may do the same. As a part of the bankruptcy proceeding the assets & debts of the company would be evaluated & the debts would be repaid as per the debtor's capacity & based on the directions of the court.
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