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Ex-bankruptcy shyster here (still licensed--just not practicing anymore, Thank God). Yeah, a Chapter 11 is a reorganization, a Chapter 7 is a liquidation*. I did mostly consumer work, where the Chapter 11's were usually just a prelude to a Chapter 7 when no viable plan of reorganization could be produced, but business bankruptcies aren't always that way--witness GM and Chrysler.
Edit: *Chapter 13's are also a reorganization, intended for consumers, but some consumers with enough debts or assets can end up in 11 instead.
Thanks. Looks like that “prelude” to eventual liquidation is a likely scenario. It’s sorta like all those miserable married couples who go through “counseling” together before heading to their respective divorce lawyers separately.