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Prepetitioned Deals May Be On The Rise

Law360 (March 6, 2008, 12:00 AM EST) -- Faced with a weak economy and a tight credit market, more companies are likely to put together prepackaged and prearranged deals before they take the plunge into bankruptcy.

Lawyers said a surge in overall Chapter 11 filings is expected this year, and these prepetition arrangements could play a more critical role for companies that are trying to avoid the high costs and yearlong stretches in bankruptcy.

A BankruptcyData report said the month of February alone showed a spike of four prepackaged plans — which was the...
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