Reorganization


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Reorganization

The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent.

Reorganization is ordinarily accomplished by way of a Judicial Sale of the property of the corporation. The purchasers then often form a new corporation to which substantially all assets of the old are transferred.

Cross-references

Bankruptcy.

reorganization

n. the implementation of a business plan to restructure a corporation, which may include transfers of stock between shareholders of two corporations in a merger. In bankruptcy, a corporation in deep financial trouble may be given time to reorganize while protected from creditors by the bankruptcy court. The theory is that if the business is able to get on its feet the creditors will eventually collect. (See: corporation, merger, bankruptcy)

References in periodicals archive ?
Chapter 11 in the bankruptcy code was designed for administering complex business reorganizations involving multi-million dollar companies.
The Company will keep its shareholders and the general market informed, in accordance with the rules and time periods established by the applicable legislation, of any developments related to the subject-matter of this Material Fact notice and any other relevant facts in connection with the progress of the court-supervised reorganization case.
For example, shareholders of the target are permitted to receive boot (property other than stock of the acquiring corporation) in a type A reorganization. A target shareholder who receives boot in a type A reorganization recognizes gain to the extent of the lesser of the boot or the gain realized upon the exchange of the stock.
Notably, in contrast to the previous reorganizations, Marcos' reorganization was decreed and accompanied by his assertion of his powers as commander in chief to assume control not just of executive offices, but also of all local governments-and putting every official on notice that '[they] shall continue to function under their present officers and employees and in accordance with existing laws, until otherwise ordered by me or by my duly designated representative.' Which essentially meant: Cooperate, or else.
Reorganization, as a way of settling corporate bankruptcy, has been connected with high expectations in the Czech Republic since 2008 in which reorganization was possible for the first time after legal framework changes.
Section 361(a) states that no gain or loss to a corporation will be recognized if that corporation is a party to a reorganization and exchanges property solely for stock of another corporation involved in the reorganization.
Judicial reorganization, the two modes can be made through a plan, a plan to restructure the debtor's business plan or a liquidation of any assets of the debtor's assets.
Upon the development of the reorganization craze it was immediately recognized that from a business, HR, and interpersonal level the causes, processes and effects of corporate-wide reorganizations needed to be understood and advice provided to corporate executives.
Northwest Airlines issued a filing to the US Securities and Exchange Commission saying it expects to report a $230-$270 million pre-tax profit in 2006 excluding reorganization and unusual items.
Such a tax-flee reorganization is essentially a mere rearranging of the corporate ownership structure.
* Adopt simpler and broader GST relief provisions for transfers of property among affiliated companies in connection with corporate restructurings and reorganizations.
In January 2003, the IRS issued regulations to expand the scope of the term statutory merger or consolidation to allow limited liability companies (LLC) to be party to an A reorganization. Consequently, the word "corporation" was removed from the regulatory definition of statutory merger or consolidation.