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Annual Review of Financial Economics

Volume 15, 2023

The Changing Face of Chapter 11 Bankruptcy: Insights from Recent Trends and Research

Abstract

Several recent trends have reshaped the nature of bargaining in Chapter 11. These include increasingly complex prebankruptcy capital structures, decreasing time in Chapter 11 due to prepacks and prenegotiated plans, growing use of restructuring support agreements (RSAs) and sales of substantially all assets, an increased number of defaulting private equity–owned firms, and an increase in activity of specialized distressed debt investors. These trends have changed the balance of power in favor of senior secured lenders, who further shape the course of out-of-court negotiations. We examine evidence of the impact of these changes on important stakeholders, including creditors and workers.

Keyword(s): 363 sales, bankruptcy, Chapter 11, creditor rights, defaults, distressed debt, JEL G33, JEL G34, JEL K22, leveraged loans, private equity, recovery rate
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2023-11-01
2024-05-08
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/content/journals/10.1146/annurev-financial-100521-103241
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The Changing Face of Chapter 11 Bankruptcy: Insights from Recent Trends and Research
Annual Review of Financial Economics 15, 351 (2023); https://doi.org/10.1146/annurev-financial-100521-103241
/content/journals/10.1146/annurev-financial-100521-103241
/content/journals/10.1146/annurev-financial-100521-103241
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