Chapter 11 bankruptcy is a legal process in the United States that allows businesses to reorganise their debts and continue operating. 

Often used by companies facing severe financial difficulties, chapter 11 provides a lifeline for businesses that still have the potential to recover. Unlike chapter 7, which involves liquidating a company's assets and shutting it down, chapter 11 focuses on restructuring the business to make it profitable again. 

When a company files for chapter 11, it works with its creditors to create a reorganisation plan. This plan outlines how the company will pay back its debts over time while continuing to do business. A court oversees the entire process to ensure that the plan is fair to all parties involved. If the company can't come up with a plan, the creditors can propose one instead.

Many well-known companies have successfully used chapter 11 to overcome financial challenges. For example, General Motors (GM) filed for chapter 11 in 2009 during the global financial crisis. This allowed GM to restructure its operations, cut costs, and, with government support, emerge from bankruptcy a month later. Within a year, GM was profitable again.

Another example is United Airlines, which filed for chapter 11 in 2002. Facing rising fuel costs and the economic impact of the 9/11 attacks, United used chapter 11 to renegotiate labour contracts, reduce expenses, and restructure its debt. After nearly three years, the airline emerged from bankruptcy in 2006 and returned to stability.

Chapter 11 offers businesses a second chance, balancing their need to survive with the rights of their creditors. While the process can be complex and time-consuming, it has proven to be a valuable tool for many companies, enabling them to recover and thrive.