Under chapter 11, the “best interests” test requires only that the company pay what it would have under chapter 7 bankruptcies. In Chapter 7, the company is liquidated and whatever’s left gets distributed to those owed. Filing chapter 11 enables the company to keep going, which sometimes means there’s more left to fight over. Under chapter 11, equity holders and those with unsecured loans lose everything, as they would with chapter 7. Those with secured loans get what’s left.
Chapter 11 is still a bankruptcy, and people who made loans or invested still lose money.