Bankruptcy Cases Suffer from Shrinkage

FTI Consulting Inc. ($FCN) recently released a “data”-driven analysis-cum-marketing-piece* that highlights the apparent rise of “Pre-filings” — otherwise known as prepackaged, prearranged or prenegotiated chapter 11 bankruptcy cases — during the 2015-2017 period. FTI examined 300 emerged cases (via plan of reorganization) from 2011-2017 and concluded that,

“Most restructuring professionals recognize that the average duration of Chapter 11 cases has become shorter in recent years, but the contraction in average case length has been particularly striking since 2015.”

Indeed, FTI points out that…

“…nearly 66% of cases that emerged in 2016-2017 were Pre-filings compared to approximately 40% over the previous five years….”


“Consequently, the average duration of Chapter 11 reorganizations fell by nearly one-half in 2016-2017 compared to 2011-2015, to 235 days from 435 days.”

Sooooo, despite the rise in Pre-filings....

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