Sometimes an enterprise will file a petition in the Court for a prearranged Chapter 11 reorganization. In most cases, this simply means that the enterprise and its significant creditors have agreed on the terms of the reorganization plan prior to the filing of the petition with the Court. Other times, the parties may have taken the extra step of completing the reorganization plan and arranging for voting by the creditor classes prior to filing. This is referred to as a prepackaged bankruptcy.

Prearranged and prepackaged bankruptcies are done to save time and expense as the bankruptcy process generally is time consuming and involves significant costs. A prepackaged bankruptcy may allow the debtor to avoid certain legal and other professional fees associated with the reporting obligations and related disclosure statements and schedules which are often found in a more common bankruptcy filing. However, the legal requirements of prearranged and prepackaged bankruptcy filings, including the Court's confirmation of the plan, are no different from a standard bankruptcy filing. For this reason, prearranged and prepackaged bankruptcies fall within the scope of ASC 852.

If a prepackaged plan (i.e., prior to filing with the Court) involves an offer to sell securities, a registration statement may have to be filed with the SEC before the vote on the plan by stakeholders.