Chapter 11 in the U.S. Bankruptcy Code contains the provisions for Court-supervised reorganization of debtor companies.

Chapter 11 provides the debtor a vehicle for operating its business under protection from its creditors while developing a plan for resolving its financial problems. This Plan of Reorganization details how the debtor will pay valid creditor claims, restructure its business, operations and finances, emerge from Chapter 11, and re-establish its ability to be financially self-sustaining. In some cases, it may be determined that the needs of the debtor and its creditors are best served by a Plan of Reorganization that is in fact a Plan of Liquidation. In this situation the debtor will cease to operate as a going concern. A Liquidating Trust is established as a vehicle for liquidating the debtors remaining assets and distributing the proceeds to the Trust Beneficiaries.

The law provides for a period of time, beginning at the Petition Date, within which only the debtor has the right to file a plan and to seek confirmation of it. Specifically, the debtor has 120 days to file a plan, and then 180 days in which to seek confirmation. However, the Bankruptcy Court may extend these "exclusivity" periods. Among the many requirements for a plan is that the court must find that it is "feasible." This means that the plan must result in a viable business enterprise that will not slip back into bankruptcy. The court determines whether a plan is feasible during the confirmation and consummation processes.

A Chapter 11 plan is a contract among the parties in interest in the debtor's Chapter 11 case. The plan is binding on all affected parties if accepted by the requisite majorities of each class of affected creditors and equity owners and confirmed by the Bankruptcy Court, even if they did not vote in favor of the plan. In certain circumstances a plan may be confirmed even if some (but not all) classes do not accept the plan.

On September 24, 2001, Dairy Mart Convenience Stores, Inc. filed a Chapter 11 Bankruptcy Petition in the Southern District of New York. On March 14, 2003 the debtor emerged from the Bankruptcy process and gave notice of confirmation and effectiveness of the First Amended Joint Plan of Liquidation of Dairy Mart. As part of this plan, a Liquidating Trust was established and Wayne R. Walker was appointed Liquidating Trustee to oversee and administer the liquidation of any remaining assets and the eventual distribution to the Trust Beneficiaries.