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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: XBrit who wrote (91446)4/7/2001 11:43:58 PM
From: Ilaine  Read Replies (1) of 436258
 
Essentially the power of a judge in a bankruptcy case is to decide who gets what. They are dividing up the corpse, if it's dead, or else deciding how much to pay in pennies to the dollar if it's not dead.

In a debtor-in-possession Chapter 11, there isn't (usually) a trustee (neutral third party) so the neutral third party is the judge. The corporation continues to operate but under the supervision of the judge. The automatic stay prevents creditors from filing suit to collect money that is owed, or using other legal actions to make sure they get paid. Leases and contracts can be rejected (legalese for breached) by the person filing bankruptcy but not by the other party.

The judge can get PG&E out of onerous contracts, and can approve new ones, but he can't force anyone to the table. If California doesn't want to deal, he can't make them deal. All he can do is approve or deny a proposed deal. And try to knock some sense into people's heads.

Bankruptcy judges are very pragmatic people, usually.
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