Chapter 11 of the Federal Bankruptcy Reform Act of 1978 tries to allow for a planned restructuring of the corporation while providing for payments to the creditors. Chapter 11 proceedings begin when a petition is filed by the corporation or by three or more creditors. A federal judge either approves or disapproves the petition for protection under Chapter 11. During the petition period, the judge protects the managers and shareholders from the creditors and tries to negotiate a rescue plan between the shareholders and creditors. During this time, the corporation continues to do business. Once in Chapter 11, the firm’s management has 120 days to submit a reorganization plan, which usually includes debt rescheduling and the transfer of equity rights. Anyone has the right to submit such a plan, but only very rarely does anyone but management submit a reorganization plan. The plan must secure the agreement of two-thirds of the shareholders and two-thirds of each class of creditors; for example, senior creditors whose debt is secured and junior creditors whose debt is unsecured are considered separate classes. After the plan is approved, the judge confirms it. At this point, any payments, property sales, or securities issues or transfers of equity positions take place under the supervision of the court. Some critics argue that Chapter 11 is flawed and needs reform because it favors shareholders over creditors and junior creditors. They claim it is unfair that shareholders and junior creditors can vote to approve the reorganization plan as equals with the senior creditors.