Expedited bankruptcy proceedings continue to seem as much a rule of late as the exception for struggling companies, at least large ones, as the economy continues to search for a robust recovery. A March 2010 study by Standard & Poor's (S&P), Bankruptcy Financing Isn't What It Used to Be, in part blames the bankruptcy sea change on the market meltdown and the increased cost of capital and credit that ensued. The March S&P study poses the question of whether a faster bankruptcy proceeding is necessarily the proper move for the long-term health of the filing company or if such fast motion exposes many companies, which needed more wholesale restructuring through Chapter 11, to massive problems in the event of continuing woes for the long-struggling US economy. S&P noted that a failure by companies to address key existing problems in their struggling operations could ultimately decrease recovery prospects for creditors and promote long-term credit-rating damage.
The Need for Speed: Is the Rapid Pace of Filings in the New Era of Bankruptci... Brian Shappell Business Credit; May 2010; 112, 5; Docstoc pg. 12 Reproduced with permissio
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