Basically a chapter 11 bankruptcy is when a debtor files a bankruptcy petition asking the court permission to reorganize. Those filed under a chapter 11 are businesses and people wanting to reorganize but don’t qualify for a chapter 13 reorganization.
When a chapter 11 is filed, the debtor's called a “debtor-in-possession”. A major feature that separates a chapter 11 from chapters 7 and 13 is that the person operating the case in the court’s point of view is the trustee in types of bankruptcies later; otherwise in chapter 11 bankruptcies the debtor runs the bankrupt person or corporation's affairs.
There's two types of chapter 11 bankruptcies; standard and small business. A debtor files his petition and schedules the same as any other bankruptcy. There are extra forms to be filed though. Also, the debtor files a plan of reorganization and a disclosure statement, the bankruptcy court has to approve both. The chapter 11 debtor also files reports monthly to either the US Trustee or the Bankruptcy Administrator, and periodically pays fees to the US Trustee based on their arranged payments.
The main difference between the chapter 13 and 11 reorganization is time and money. A chapter 13 plan can have a plan of reorganization filed within 15 days of filing the chapter 13 case. With a chapter 11 it could take 90 or more days to file reorganization after the case. Also, the payments are to be made to a chapter 13 trustee starting 30 days after filing the case with a chapter 13 plan of reorganization. A debtor may go 3 or more months with a chapter 11 without making payments to creditors, since he doesn’t pay many creditors until the payment plan is approved, which could take a year or so, considering how difficult the case is, whether a creditor has a lien, etc...
Most importantly, a chapter 13 debtor pays a trustee, while a chapter 11 debtor pays the creditors themselves, rather than having an appointed trustee unless the chapter 11 debtor is not doing things appropriately. If a chapter 11 debtor misbehaves, the case can be rejected, changed to a chapter 7, or a chapter 11 trustee can be chosen to run the case rather than the debtor-in-possession. If there’s enough interest, a committee for unsecured creditors can be selected to represent them and be their voice to tell the court their opinion of what’s appropriate in a given case.
