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Bankruptcy: A form of debt relief, there are two kinds of bankruptcy. Personal bankruptcy: an individual, sole trader or partnership is formally declared bankrupt by the court (ie they cannot pay their . . . View Full Definition

Bankruptcy Cost View: The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt financing.

Prepackaged Bankruptcy: A bankruptcy in which a debtor and its creditors pre-negotiate a plan of reorganization and then file it along with the bankruptcy petition.

Trustee In Bankruptcy: One appointed by a bankruptcy court, and in whom the property of the bankrupt vests. The trustee holds the property in trust, not for the bankrupt, but for the creditors.