Avoiding The Prepack Steamroller

Law360, New York (January 20, 2010, 1:24 PM ET) -- Prepackaged bankruptcy filings (referred to as “prepacks”) have been increasing in use the last several years because they allow a company to swiftly emerge from Chapter 11, thereby saving time, sparing expense and reducing the risk of damage to its business.

The growing use of prepacks provides significant benefits to distressed companies, their senior lenders, customers, suppliers, employees and other stakeholders who support the prepack.

On the other hand, junior classes of debt and equity are often wiped out because they appear to be out of...
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