As interest rates have risen and credit markets have tightened, many public companies formed via the de-SPAC process are trading far below their initial price. By some estimates, close to 100 of these companies lack sufficient liquidity to fund their current level of spending over the next year.
To date, at least a dozen of these companies have been forced to file for bankruptcy, with more likely to file in the near future. Chapter 11 of the U.S. Bankruptcy Code provides financially distressed companies with powerful tools that can be used to de-leverage balance sheets, reject unprofitable contracts and leases and preserve going-concern value.
Benefits of Bankruptcy for Distressed De-SPACed Companies
For distressed de-SPACed companies, a …
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