If a company becomes insolvent, it may be possible to restructure its balance sheet, either with the voluntary cooperation of its creditors or under the jurisdiction of bankruptcy laws. In general, the company is valued on a debt-free basis and develops a new and viable capital structure acceptable to all parties and the bankruptcy court, if a bankruptcy filing has been made. Investors accept or reject the plan of reorganization based on their assessment of whether they perceive themselves as being better off with their proposed piece of the new capital structure or whether they prefer a liquidation of the company.