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An example of proceedings that are not necessarily stayed automatically are family law proceedings against a spouse or parent.Further, creditors may file with the court seeking relief from the automatic stay.Appointment of a trustee requires some wrongdoing or gross mismanagement on the part of existing management and is relatively rare.Some contracts, known as executory contracts, may be rejected if canceling them would be financially favorable to the company and its creditors.The Bankruptcy Code accomplishes this objective through the use of a bankruptcy plan.The debtor in possession typically has the first opportunity to propose a plan during the period of exclusivity.Upon its confirmation, the plan becomes binding and identifies the treatment of debts and operations of the business for the duration of the plan.

While the automatic stay is in place, creditors are stayed from any collection attempts or activities against the debtor in possession, and most litigation against the debtor is stayed, or put on hold, until it can be resolved in bankruptcy court, or resumed in its original venue.

In Chapter 11, in most instances the debtor remains in control of its business operations as a debtor in possession, and is subject to the oversight and jurisdiction of the court. A debtor in possession can acquire financing and loans on favorable terms by giving new lenders first priority on the business's earnings.

Chapter 11 retains many of the features present in all, or most, bankruptcy proceedings in the U. The court may also permit the debtor in possession to reject and cancel contracts.

If at least one class of creditors votes against the plan and thus objects, the plan may nonetheless be confirmed if the requirements of cramdown are met.

In order to be confirmed over their objection the plan must not discriminate against that class of creditors, and the plan must be found fair and equitable to that class.

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