Losers in ‘creditor-on-creditor violence’ left with crumbs

Liability management exercises are facing mounting scrutiny as Moody’s data shows excluded senior lenders recover an average of just 14 cents on the dollar when borrowers later enter Chapter 11, compared with 57 cents in bankruptcies not preceded by creditor-on-creditor transactions, while research suggests many LMEs merely delay rather than prevent a formal restructuring.

More from the Financial Times (subscription required).