Final answer:
The assertion that Chapter 11 bankruptcies lead to liquidation is false; Chapter 11 allows a company to restructure debts and continue operating, which can help it return to profitability.
Step-by-step explanation:
The statement that Chapter 11 bankruptcies represent complete liquidation or shutting down of a business is false. Chapter 11 is actually a form of bankruptcy that allows a company to restructure its debts and reorganize its business affairs. The purpose of Chapter 11 is to give a struggling business the opportunity to restructure and continue operating, which can be more beneficial for the business, its creditors, and its employees than shutting down.
Many firms in the United States file for bankruptcy every year and continue operating because it allows them to reorganize their debts and continue generating revenue, while potentially returning to profitability. However, for businesses that are unable to recover or become profitable in the long term, shutting down may eventually become the most sensible option.