When a troubled business is unable to pay its creditors, it may file (or be forced by its creditors to file) for bankruptcy in a federal court under Chapter 7. A Chapter 7 filing means that the business ceases operations unless those operations are continued by the Chapter 7 Trustee. A Chapter 7 trustee is appointed almost immediately, with broad powers to examine the business's financial affairs. The Trustee generally liquidates the assets and distributes the proceeds to the creditors. This may or may not mean that all employees will lose their jobs. When a large company enters Chapter 7 bankruptcy, entire divisions of the company may be sold intact to other companies during the liquidation.
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