Which of the following is a benefit of filing for Chapter 11?

Filing for Chapter 11 offers several benefits designed to help a distressed company restructure and emerge more viable. One significant advantage is the ability to stop accruing post-petition interest on unsecured debt. This means that once a company files for Chapter 11, interest on unsecured debts does not accumulate during the restructuring process. This can significantly ease the financial burden during a critical time and allows the company to focus on reorganization efforts rather than the growing cost of interest.

This strategic benefit alleviates some of the financial pressures that unsecured creditors could otherwise impose during the bankruptcy proceedings, providing essential breathing room for the company to develop a feasible plan to return to profitability without the compounding effects of accruing debt.

The other options do not accurately reflect the benefits of filing for Chapter 11. Immediate liquidation of assets is typically associated with Chapter 7 bankruptcy, not Chapter 11. While it may be possible to obtain new financing during a Chapter 11 proceeding, there is no guarantee of approval, as new financing hinges on multiple factors, including lender willingness and the terms of the reorganization plan. Finally, Chapter 11 does not guarantee a complete erasure of all debts; rather, it allows the company to renegotiate or restructure its obligations in a manner