Prepackaged, Prearranged, Traditional Chapter 11; Going-Concern Asset Sales; Chapter 7
Chapters in this video
- 0:00 Speed versus optionality: the Chapter 11 tradeoff
- 1:38 Three flavors: prepackaged, prearranged, traditional
- 2:45 RSA as financial handcuffs and termination traps
- 3:36 Going-concern asset sale and the stalking-horse auction
- 4:40 Free and clear: five statutory conditions and the proceeds trap
- 5:51 Chapter 7 mandatory trustee and management replacement
- 6:31 Conversions run both directions
- 6:50 Rapid-fire exam recap
What this video covers
- How prepackaged, prearranged, and traditional Chapter 11 differ based on when plan negotiation and voting occur, and why speed trades off against optionality
- Why a prepackaged Chapter 11 only works for capital-structure fixes, not operational turnarounds requiring lease rejection or contract slashing
- What a restructuring support agreement (RSA) does: binds key creditors to vote for the plan, blocks competing plans, and can be terminated for missed milestones
- Why RSA fees are paid to signing creditors, and why an RSA is not an unconditional guarantee
- How a going-concern asset sale works via stalking-horse auction, and why it is faster than plan confirmation because it skips disclosure statement, voting, and confirmation
- The five statutory conditions for selling property free and clear of liens, claims, and encumbrances, and why claims attach to cash proceeds rather than disappearing
- Why Chapter 7 requires a trustee who always replaces management, versus Chapter 11 where debtors in possession usually remain in control
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 79 course also includes adaptive practice questions and spaced-repetition flashcards.