“G” Reorgs: The Way to Extricate Yourself from a Chapter 11 Bankruptcy

A “G” reorganization is a specific category of I.R.C. § 368 reorganization intended to facilitate the restructuring or rehabilitation of a distressed corporation in a Title 11 bankruptcy case. A "G" reorganization requires the transfer by the corporation of all or a part of its assets to an acquiring corporation, so a "G" reorganization requires two parties—an acquiring and a target (or transferor) corporation. Be mindful to comply with the specific requirements outlined in Section 368 to maintain the tax-free treatment of the transaction, as failure to meet these requirements could result in adverse tax consequences for both the transferor and acquiring corporations.

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