Companies Often Overlook Planning for Post-Bankruptcy Success, New FTI Consulting Study Finds
Majority of Respondents Are Not Positioned for Scalable and Transformational Growth upon Emergence from Bankruptcy
The report, Emerge to Grow: Market Insights and Playbook for Achieving Profitability and Sustainable Growth Post-Bankruptcy, surveyed 50 business leaders from large companies with recent experience going through Chapter 11 to gain quantifiable insights about the bankruptcy process. Those findings formed the basis of an
The survey found that 72% of respondents believed their post-bankruptcy capital structure was at least somewhat burdensome, and nearly 1 in 4 considered it to be onerous or an inhibitor to growth. At the same time, only 12% of respondents said they aggressively addressed structural issues — such as defining a new operating model — that could better position them for transformational growth.
Looking beyond the five core dimensions, nearly half of respondents (44%) did not feel they were able to meaningfully focus on other important business issues during the bankruptcy process, a fact that may limit their ability to thrive after emerging from bankruptcy.
“The practical aspects of the bankruptcy process present limitations and challenges for a reorganizing company,” said
Most respondents believe that they were not fully prepared for post-bankruptcy success. According to the survey, in the top three dimensions, respondents were least likely to be substantially prepared for post-bankruptcy success on the dimension of technology (14%), followed by cost (22%) and talent (26%).
Of the 134 Chapter 11 cases that confirmed or closed from
“Companies that undergo bankruptcy are taking the necessary and difficult steps to realign their businesses, and it is in every stakeholder’s best interest for those companies to emerge as strong and as healthy as possible,” said
Visit FTI Consulting’s website to read the full study and the Emergence Playbook.
Demographics and methodology
From the set of 358 bankruptcy filings between
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Source: FTI Consulting, Inc.