Corporate bankruptcy proceedings are governed by specific chapters of bankruptcy law, such as Chapter 7 and Chapter 11 in the United States, which provide different avenues depending on whether the company intends to liquidate its assets and cease operations (Chapter 7) or reorganize its finances and continue operating under court supervision (Chapter 11).

1. Chapter 7 Bankruptcy (Liquidation):  In Chapter 7, a trustee appointed by the court takes control of the company's assets, sells them, and distributes the proceeds to creditors. This chapter is often chosen when the company has no viable way to continue operations profitably or when liquidation is deemed the most efficient way to repay creditors.

2. Chapter 11 Bankruptcy (Reorganization): Chapter 11 allows the company to remain in control of its operations as it develops a plan to restructure its debts and finances. The goal is to create a viable business model that can sustain operations while paying creditors over an extended period. This process involves negotiating with creditors, submitting a reorganization plan to the court for approval, and implementing changes to improve profitability and financial stability.

3. Legal Process and Proceedings:  To initiate corporate bankruptcy, the company files a petition with the bankruptcy court detailing its financial situation, including assets, liabilities, income, and expenses. An automatic stay is typically issued upon filing, halting creditors from taking further collection actions against the company. The court appoints a trustee or examiner to oversee the proceedings, ensuring transparency and fairness in asset distribution and creditor negotiations.

4. Impact and Consequences: Corporate bankruptcy has significant implications for stakeholders, including shareholders, employees, suppliers, and creditors. Shareholders may lose their investment, while employees may face job losses depending on the outcome of the restructuring or liquidation. Suppliers and creditors may receive partial repayment depending on the assets available for distribution and the hierarchy of creditor claims under bankruptcy law.

5. Post-Bankruptcy Rehabilitation:  Successful emergence from bankruptcy requires a carefully executed reorganization plan that addresses the company's financial weaknesses and ensures long-term sustainability. Companies often seek to rebuild their reputation, restore investor confidence, and regain access to credit markets through improved financial management and operational efficiency.