Quick-Rinse Bankruptcy

A quick-rinse bankruptcy is a bankruptcy proceeding that is structured to move through legal proceedings faster than the average bankruptcy. The term quick-rinse bankruptcy first emerged during the credit crisis that started in 2008 and was used to describe the planned bankruptcies of U.S. automotive giants Chrysler and General Motors. In order for quick-rinse bankruptcies to be effective, involved parties must negotiate terms prior to the proceedings. These negotiations take place between the government, creditors, unions, shareholders and other parties in order to prevent filings by these parties in court that would otherwise slow down the process. A quick-rinse bankruptcy may also be known as a controlled bankruptcy.