Moody's Sees Benefits In Early Chapter 11 Filings

Law360, New York (February 24, 2006, 12:00 AM EST) -- Companies experiencing financial difficulties may benefit from filing for bankruptcy sooner rather than later if insolvency is inevitable, according to a recently released report by Moody’s Investor Services.

The attractiveness of filing for early bankruptcy may be increasing, according to the report, which noted that Northwest Airlines, Delta Airlines and Delphi Corp. all pursued Chapter 11 bankruptcy while maintaining cash balances sufficient enough to continue operations for some period of time.

“In the face of weak or deteriorating business trends, limited prospects to curtail rapidly rising...
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