Will "Prepacks" Lead To More Chapter 22s?

Law360, New York (January 16, 2008, 12:00 AM EST) -- Prepackaged bankruptcy filings (colloquially referred to as “prepacks”) and other alternatives to traditional Chapter 11s appear to be on the rise.

While companies can utilize prepacks to achieve a rapid financial restructuring, they may forsake the opportunity to implement needed operational changes. As a result, more companies that emerge from Chapter 11 may need to refile, resulting in a phenomenon known as Chapter 22, which often entails liquidation.

Nevertheless, astute investors will find ways to benefit from these opportunities.

Benefits Of Prepacks

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