On August 15 ，2001，Covad Communications，a provider of high-speed Internet services，filed for chapter 11 re-organization under the U.S bankruptcy code. At the time of the filling，the company had about＄1.6 billion in debt and ＄1.1 billion in assets. In addition to the normal accounts pay-able，lease obligations，the firm had about ＄1.4 billion in debt on which it had already defaulted. Plus，the company had several legal filings against it . A firm in this situation could reasonably be expected to spend a year or longer in bankruptcy .Not so with Covad. Its reorganization plan was confirmed by the U.S Bankruptcy court on December 13，2001，less than four months after the date of filing!
Firms typically file bankruptcy to seek protection from their creditors，essentially admitting that they cannot meet their fi-nancial obligations as they are presently structured.
Once in bankruptcy，the firm attempts to reorganize its financial picture so that it can survive. A key to this process is that the creditors must ultimately give their approval to restructuring plan. The time a firm spends in Chapter 11 depends on many things，but
it takes to get creditors to agree to a plan of reorganization.