The company has suspended a $1 billion share sale and sought DIP financing. It filed for bankruptcy in May.
Some perceive Chapter 11 as a fix-all for troubled companies, even though it’s not.
Financially distressed companies will find that Chapter 11 can be expensive, slow, and involve lots of oversight and reporting requirements.
For the “second phase” of the response to the pandemic, the question is whether business and financial counterparties will equally share the risk of loss.
A company in Chapter 11 must show it can pay "administrative claims" by creditors in order to qualify for DIP financing.
