Liabilities subject to compromise refers to the debtors' liabilities, in the US, incurred before the start of Chapter 11 bankruptcy cases.[1]
This amount represents the debtors' estimate of known or potential pre-petition claims to be resolved in connection with the Chapter 11 cases. Such claims remain subject to future adjustments. Virtually all of the corporation's pre-petition debt is in default due to the filing and is included in Liabilities subject to compromise. Payment terms for liabilities subject to compromise are established as part of a plan of reorganization.