Distressed de-SPACed companies are increasingly turning to chapter 11 as a means of restructuring their debts and preserving going-concern value.
TAKEAWAYS
- Many de-SPAC mergers in 2020 and 2021 involved pre-revenue or not-yet-profitable companies that are now struggling to remain viable as interest rates rise.
- At least a dozen distressed de-SPACed companies have turned to chapter 11 in an effort to restructure their debts and salvage their going-concern value.
- Companies requiring a restructuring can reduce the uncertainty of a chapter 11 case by pursuing a prepackaged or pre-negotiated plan of reorganization.
Although special purpose acquisition companies (SPACs) have been around for decades, they took off during the COVID-19 trading b…
Read the full article at: https://www.jdsupra.com/legalnews/bankruptcy-and-restructuring-7469145/