26 February 2012
Durations and Recoveries in Cases
There are many factors that affect the length of time a company spends in bankruptcy. Some key factors are: Complexity of the capital and legal structure, number of affiliate companies involved in the bankruptcy filing, bankruptcy litigation, environmental issues, financial reporting systems, quality of the legal and financial advisors, inter creditor disputes, presence of fraud, and the quality of the management team.
Cases generally last one to two years in duration, and the outcomes for unsecured creditors depends upon the amount of the senior and priority claims ahead of unsecured creditors in any distributions in a reorganization.
Lynn LoPucki, a law professor at UCLA provides the following information about the number of days companies have spent in bankruptcy:
|Year||Median Days||# Cases|