Creditor vs Debitor Restructuring

Question

Hello,

I'm going into restructuring working for a group for my SA that does a good mix of distressed M&A, debtor, and creditor bankruptcy mandates. I just wanted to ask - why is it that many on this forum like the debtor side more than the creditor?

I'm looking to go into distressed credit HF investing after my stint. From what I know, the creditor mandates are much more similar to the work a hedge fund does, and debtor is much more from a PE shop perspective in terms of buyside opps.

hklevfinbanker · Accepted Answer

This has been covered at length elsewhere

Company side:

You have to solve the problem here

You’ll run 100 scenarios and write 100+ page options paper on all possible alternatives and will probably run multiple parallel streams to get the company out of whatever bind they’re in (e.g. new money raise, sell assets, D4E swap etc.)

Creditor side:

You’re in receiving mode.

ktav18 · Answer

Debtor-side mandates are your best bet. Reason why is that you not only have access to all of the debtor's information, but you are actively evaluating numerous scenarios under which a proposed plan of reorganization would get approved by the various classes of creditors. At times, there's a lot of game theory and creativity involved with thinking through and anticipating responses of the various classes of creditors when putting this together for approval.

motley_accrual · Answer

Just to piggy back (for others sake), part of what makes UCC work so shitty is that UCCs are formed in bankruptcy. Generally speaking, by the time a company is in bankruptcy, creditors have organized and there’s usually (not always) some semblance of a plan of reorg.

ASEANalyst · Answer

I have only done debtor-side mandates in the past and but IMO there are couple easy points why would you prefer debtor mandate instead of creditor.

1. More fees

Easy, you are getting paid a percentage for the whole restructured debt pie (which in some cases more expensive than M&A fees) instead for a single creditor's pie.

2. More challenging

Debtor mandate (esp.

+419	Evercore Intern Seizure	64	3h
+130	UBS IB Americas has failed, now behind Santander and Stiffel	34	17h
+125	Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday.	43	54m
+79	deleted deleted deleted deleted deleted	45	3h
+69	Some banks are overrated as fuck	22	3h
+67	How do I understand vs. just memorizing?	12	3h
+48	Associate & Above IB exits	18	1d
+48	The good and bad with Wells Fargo	18	6h
+42	Tech to IB Pivot	22	11h
+34	Advice on Neuromaxxing	9	4h

1	redever	99.2
2	Secyh62	99.0
3	kanon	99.0
4	BankonBanking	99.0
5	Betsy Massar	98.9
6	CompBanker	98.9
7	DrApeman	98.9
8	dosk17	98.9
9	GameTheory	98.9
10	Kenny_Powers_CFA	98.8

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

Creditor vs Debitor Restructuring

Elite Career Bootcamp. Top Job Offer Guaranteed.

Elite Career Bootcamp. Top Job Offer Guaranteed.

Creditor vs Debitor Restructuring

Trending Content - Investment Banking Forum