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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.



West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.


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)

Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.
References in periodicals archive ?
The main use and advantage of a tax-free reorganization is to acquire or dispose of the assets of a business without generating the income tax consequences that would result in a straight sale or purchase of those assets.
The process was declared completed in 1973, but the commission set up for the purpose was allowed to pursue reorganization plans.
For a detailed discussion of the issues in this area, see "Reorganizations and Tax Attribute Survival," by Ryan M.
Tax-free reorganizations generally are divided into three categories:
TEI urges the Standing Committee to recommend that the GST relief rules be simplified and expanded in order to eliminate the imposition of GST on transfers of property among affiliates in connection with reorganizations of corporate groups.
By allowing tax-free treatment for cross-border mergers organized under foreign law, a tremendous amount of flexibility has been provided in structuring foreign reorganizations in an increasingly global business market.
If the selling shareholders receive stock in the buying corporation in consideration of their business' sale, then the selling shareholders may be able to avoid recognizing gain under the tax-free reorganization rules of Sec.
In the earlier reorganizations, MTMC approved 20 employees for this program.
FINANCIAL EXECUTIVE: Traditionally, in reorganizations that involve getting closer to the customer, corporate staff is the first to go.
What caused Amdura to file for Chapter 11 - and the elements that both contributed to and hampered the subsequent reorganization of the company - give a good indication of what other companies might find in a 1990s style reorganization.