On the AIG board: PAULSON A LOAN SHARK Who knew? of course , hes from Goldman --- DOES THIS MEAN THAT I GET UNIVERSAL HEALTH CARE NOW? --- On the LEH board: Chapter 11 not 7 This is going UP Definition When a troubled business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection under either chapter 7 or chapter 11. In chapter 7, the business ceases operations and a trustee sells all of its assets and distributes the proceeds to its creditors. A chapter 11 filing is usually an attempt to stay in business while a bankruptcy court supervises the "reorganization" of the company's contractual and debt obligations. The court can grant complete or partial relief from most of the company's debts and its contracts, so that the company can make a fresh start. LoL