Deals done through or around insolvency. Section 363 sales, credit bids, debt-for-equity and the creditor-on-creditor mechanics of the last decade.
28 deals
What is on this page. Public transaction history — announced values, deal structures, defensive tactics and outcomes, each with its source and year. Everything here is drawn from the public record. El Dorado Capital's own segment analysis, buyer universes and live deal work are maintained privately and are not published.
Distressed, Bankruptcy and Restructuring Transactions
Chrysler / Fiat (2009)
Value: Not a cash purchase price. The US Treasury and Canadian governments committed roughly $8 billion (US) plus about C$2.996 billion (Canada) in DIP-to-exit financing to fund the sale and the new company; Fiat paid no cash upfront for its initial stake. Chrysler repaid $7.5-7.6 billion of the government loans by 2011 (Fox News 2011; NPR 2011).
Structure: Section 363 asset sale. Old Chrysler (filed Chapter 11, April 30, 2009) sold substantially all operating assets to "New Chrysler" (Chrysler Group LLC), leaving liabilities behind in the estate rather than reorganizing under a plan.
The thesis: Preserve Chrysler as a going concern and its supply chain (shared with GM and Ford) by pairing it with Fiat's small-car technology and global distribution, using government bridge financing because no private DIP lender existed in the 2009 credit freeze.
What actually happened: Fiat received an initial 20% equity stake against technology and market-access milestones, rising to 58.5% by 2011 and 100% by 2014 (buying out the UAW retiree health trust's remaining stake for about $3.65 billion), becoming Fiat Chrysler Automobiles. The UAW VEBA trust initially held 55%; secured lenders who objected recovered roughly 29 cents on the dollar. Indiana public pension funds challenged the sale as an improper "sub rosa plan"; the case reached the Second Circuit and was later mooted after the sale closed.
Why it's in the encyclopedia: The template for using Section 363 to execute what is functionally a plan of reorganization — asset sale speed versus plan-confirmation process — and the leading judicial fight over whether that bypasses creditor priority.
General Motors §363 sale — "New GM" / "Old GM" (2009)
Value: US Treasury committed roughly $30.1 billion in additional DIP/exit financing on top of about $19.4 billion in pre-filing TARP loans, for total US government support near $49-50 billion. Treasury later recovered about $39 billion selling its stake, a reported loss on the order of $10-11 billion (sources vary; ProPublica bailout tracker; NBC News reporting on Treasury's own accounting).
Structure: Section 363 asset sale. GM (filed Chapter 11, June 1, 2009) sold substantially all operating assets to a new entity (NGMCO Inc., renamed General Motors Company); the old shell, Motors Liquidation Company, retained legacy liabilities and wound down.
The thesis: Prevent a disorderly GM liquidation from cascading through the US auto supply base during the 2008-09 financial crisis by moving the viable business out of bankruptcy in days, not years.
What actually happened: The US Treasury received 60.8% of New GM's equity, Canadian governments about 11.7% (through Canada/Ontario financing), the UAW retiree health trust roughly 17.5% plus warrants, and unsecured bondholders about 10% plus warrants. Old GM's unsecured creditors were left in the liquidating shell with a fraction of face value.
Why it's in the encyclopedia: The largest and most consequential government-sponsored §363 sale, run in parallel with Chrysler's, and the definitive precedent for state-backed rescue financing structured as an asset sale rather than a bailout loan alone.
Lehman Brothers — sale to Barclays (2008)
Value: Initially reported around $1.75 billion; the real-estate and other components were later revalued closer to $1.3-1.4 billion amid post-closing litigation over the actual consideration Barclays received (Business Standard 2008 reporting on the court approval and later revaluation).
Structure: Emergency Section 363 sale of the North American broker-dealer and investment-banking business, approved by Judge James Peck within days of the largest Chapter 11 filing in US history (Lehman Brothers Holdings, filed September 15, 2008, with roughly $639 billion in assets).
The thesis: Barclays wanted Lehman's US equities, investment-banking franchise, and Midtown Manhattan headquarters without inheriting the holding company's toxic balance sheet or derivatives book, acquired at crisis speed before counterparties and staff scattered.
What actually happened: The sale closed within about a week of filing — an unprecedented pace for a transaction of that size — while the Lehman holding company estate spent years in Chapter 11 unwinding the rest. Litigation later alleged Barclays received an undisclosed windfall; the Second Circuit ultimately ruled for Barclays in 2011.
Why it's in the encyclopedia: The clearest case study in the mechanics and risks of an emergency §363 sale executed under extreme time pressure during a systemic crisis, and of the "clawback" litigation risk that follows.
Nortel Networks — patent auction (2011)
Value: $4.5 billion, against a Google-led stalking-horse opening bid of $900 million.
Structure: Public bankruptcy auction of Nortel's roughly 6,000-patent portfolio, run jointly across Nortel's US Chapter 11 and Canadian CCAA proceedings.
The thesis: Nortel's estate sought the highest possible price for its intellectual property as the company's operating businesses were sold off piecemeal; bidders wanted defensive patent coverage in the smartphone patent wars.
What actually happened: A consortium calling itself Rockstar Consortium — Apple, Microsoft, RIM (BlackBerry), Ericsson, Sony, and EMC — outbid Google to win the portfolio for $4.5 billion, roughly five times the opening bid. Allocating the proceeds among Nortel's separate national estates (US, Canadian, European) then took years of cross-border litigation, resolved in 2015 by a coordinated US-Canadian court ruling on a pro-rata basis.
Why it's in the encyclopedia: The largest patent sale in history and the leading precedent for cross-border insolvency proceeds allocation when a single global estate splits assets among competing national creditor pools.
United Airlines Chapter 11 (2002-2006)
Value: Undisclosed as a single transaction value; the case terminated roughly $9.8 billion of underfunded pension obligations, with the PBGC assuming the bulk of that shortfall.
Structure: Traditional Chapter 11 reorganization (not a §363 sale) — UAL Corporation reorganized as a standalone debtor, cancelling old equity and issuing new stock to creditors under a confirmed plan.
The thesis: Use Chapter 11's power to reject labor contracts and terminate pension plans to permanently reset United's cost structure against low-cost competitors, at the time the largest airline bankruptcy filed.
What actually happened: United terminated all four of its employee pension plans, shifting the obligations to the PBGC in what was then the largest pension default in US history; unions took steep wage and benefit cuts under threat of contract rejection. United emerged in February 2006 with old shareholders wiped out.
Why it's in the encyclopedia: Established the modern "shed the pension, cut the labor contract" playbook that essentially every legacy US airline that followed it into Chapter 11 then used.
Delta Air Lines and Northwest Airlines — Chapter 11 and merger (2005-2008)
Value: The subsequent Delta-Northwest merger was an all-stock transaction valued at roughly $3.1 billion when announced in April 2008.
Structure: Two separate Chapter 11 reorganizations (both filed the same day, September 14, 2005) followed, once each had emerged, by a stock-for-stock merger of equals completed in October 2008.
The thesis: Both carriers used bankruptcy to strip labor costs and offload pension liabilities to the PBGC, as United and US Airways had; the subsequent merger sought scale and network overlap benefits impossible to negotiate pre-emergence.
What actually happened: Delta emerged from Chapter 11 in April 2007 and Northwest in May 2007, both having cut labor costs and frozen or terminated defined-benefit pensions. The 2008 merger created the world's largest airline by traffic at the time, with Delta as the surviving entity and brand.
Why it's in the encyclopedia: Shows Chapter 11 used not as an end state but as a balance-sheet and labor-cost precondition that made a subsequent strategic merger financeable — a sequencing later repeated by American Airlines and US Airways.
American Airlines (AMR Corp) Chapter 11 and US Airways merger (2011-2013)
Value: Merger consideration was equity in the combined American Airlines Group, distributed to AMR creditors and US Airways shareholders under AMR's confirmed Chapter 11 plan; unsecured creditors were reported to have recovered close to full value, an unusually strong outcome for a mega-Chapter-11.
Structure: Chapter 11 plan of reorganization built around a merger — rather than reorganizing AMR standalone, the plan merged US Airways into the reorganized AMR, with the merger itself embedded in the confirmed plan of reorganization.
The thesis: AMR's creditors' committee concluded a merger with US Airways, negotiated during the case, would deliver more value than a standalone AMR reorganization, giving American the scale to compete with the post-merger United and Delta.
What actually happened: AMR filed Chapter 11 in November 2011; the merger was announced in February 2013 and completed in December 2013, forming American Airlines Group as the world's largest airline by several measures.
Why it's in the encyclopedia: The leading precedent for a Chapter 11 plan of reorganization structured around, and confirmed together with, a strategic merger rather than a standalone exit.
LATAM Airlines Group Chapter 11 (2020-2022)
Value: The confirmed plan raised approximately $8.19 billion in new capital (a mix of new equity and convertible/exchangeable notes) to fund the reorganization (as widely reported at plan confirmation in 2022).
Structure: Chapter 11 reorganization (filed in the Southern District of New York, May 2020) with a plan built on a large new-money equity and convertible-note raise rather than a straight debt write-down.
The thesis: LATAM's controlling shareholders (the Cueto family and Qatar Airways) and major creditors sought to keep the Latin American network intact through the pandemic's collapse in air travel by injecting substantial new capital rather than liquidating or shrinking the group.
What actually happened: LATAM emerged in November 2022 with existing shareholders heavily diluted; new equity and convertible notes went to backstopping shareholders and converting bondholders, giving creditors a large ownership stake in the reorganized airline.
Why it's in the encyclopedia: One of the largest airline reorganizations ever and a template for pandemic-era Latin American aviation restructurings funded primarily through new capital rather than debt forgiveness alone.
Avianca Holdings Chapter 11 (2020-2021)
Value: Exit financing and new capital were reported at approximately $1.6 billion, funded substantially by United Airlines and Avianca's controlling shareholder group, Kingsland Holdings.
Structure: Chapter 11 reorganization (filed in the Southern District of New York, May 2020) converting the bulk of pre-petition claims into new equity and new debt.
The thesis: United Airlines and Kingsland sought to preserve Avianca as a going concern and protect United's commercial alliance interests in Latin America by backstopping the reorganization rather than letting the carrier liquidate.
What actually happened: Avianca emerged in December 2021 with existing public shareholders diluted to a small residual stake, and control effectively held by the creditor and sponsor group that funded the exit financing.
Why it's in the encyclopedia: A second major Latin American airline case illustrating how a strategic-alliance partner (United) can effectively become the plan sponsor of a foreign carrier's US Chapter 11.
Sears Holdings / Transform Holdco (2018-2019)
Value: Approximately $5.2 billion, funded substantially through a credit bid of secured debt already held by the buyer rather than new cash (widely reported at the January 2019 auction).
Structure: Section 363 sale via bankruptcy auction. Sears filed Chapter 11 in October 2018; ESL Investments — the hedge fund controlled by Sears chairman and CEO Eddie Lampert, and among its largest secured creditors — won the auction through a new vehicle, Transform Holdco LLC.
The thesis: ESL argued a going-concern sale of roughly 425 stores plus the Kenmore and Sears Home Services brands preserved more value than a full liquidation, which most other creditors expected.
What actually happened: The sale kept several hundred stores open rather than liquidating the whole chain, but a credit bid meant Lampert paid substantially with debt claims he already held rather than fresh cash. A subsequent litigation trust sued Lampert and former directors alleging years of pre-petition asset stripping (real-estate spin-off into Seritage, brand licensing deals) that left unsecured creditors with minimal recovery.
Why it's in the encyclopedia: The definitive modern illustration of a credit bid — a secured creditor buying collateral by offsetting its own claim instead of paying cash — and of the self-dealing scrutiny an insider-led §363 sale invites.
Neiman Marcus Chapter 11 (2020)
Value: Entered Chapter 11 with roughly $4.8-5 billion in debt; the confirmed plan cut debt by approximately $4 billion.
Structure: Chapter 11 debt-for-equity reorganization — pre-petition secured lenders and noteholders received the reorganized company's new equity in exchange for cancelling their claims.
The thesis: Lenders sought to delever a retailer whose balance sheet had been loaded with debt in a 2013 leveraged buyout, using Chapter 11 to convert unsustainable leverage into ownership.
What actually happened: Neiman Marcus emerged in September 2020 controlled by its former creditors, including Pimco and Davidson Kempner; the 2013 buyout sponsors, Ares Management and the Canada Pension Plan Investment Board, were wiped out.
Why it's in the encyclopedia: A clean case of a post-LBO retailer's private-equity sponsors losing their equity entirely to lenders through a straightforward debt-for-equity Chapter 11, distinct from the IP-harvest liquidations seen elsewhere in retail.
J.Crew — "trapdoor" liability management (2016-2017) and Chapter 11 (2020)
Value: The 2016-2017 maneuver moved the J.Crew trademark, valued in filings at several hundred million dollars, outside term lenders' collateral package; the 2020 Chapter 11 plan cut approximately $1.65 billion of funded debt.
Structure: A liability-management exercise, not a bankruptcy filing: using loose "investment" and "restricted payment" covenant baskets, J.Crew transferred its trademark into an unrestricted subsidiary beyond existing term lenders' reach, then had that subsidiary issue new debt secured by the IP to a favored group of noteholders in an exchange offer. J.Crew later filed a genuine Chapter 11 (May 2020) that converted the bulk of remaining debt to equity.
The thesis: Sponsors TPG and Leonard Green, facing a distressed 2011 LBO capital structure, sought to raise fresh financing against the company's most valuable asset without needing existing term lenders' consent.
What actually happened: The maneuver became known industry-wide as the "J.Crew trapdoor" and prompted an entire generation of tighter loan covenants (now commonly called "J.Crew protections"). J.Crew nonetheless filed Chapter 11 in 2020; former lenders Anchorage Capital and GSO (Blackstone) took control on emergence, diluting the original sponsors.
Why it's in the encyclopedia: The seminal precedent for covenant-stripping liability-management exercises that move valuable collateral beyond existing lenders' reach without a bankruptcy filing.
Barneys New York Chapter 11 (2019)
Value: Approximately $271 million, paid by Authentic Brands Group and B. Riley Financial for the Barneys brand and intellectual property (not the store business).
Structure: Section 363 sale following an August 2019 Chapter 11 filing, run as a brand/IP auction rather than a going-concern retail sale.
The thesis: Facing a steep reset of its Madison Avenue flagship rent (reportedly around $30 million a year), Barneys' estate concluded the brand's licensing value exceeded the value of keeping any stores open.
What actually happened: Authentic Brands Group and B. Riley won the auction for the Barneys name and IP; every Barneys store was liquidated and closed, with the brand later licensed out for use on other retailers' floors.
Why it's in the encyclopedia: A clean example of the "brand harvest" outcome in retail bankruptcy, where the winning bidder wants the trademark and customer file, not the real estate or operations.
Debenhams administration (2019-2021)
Value: The Debenhams brand and website (not the stores) were separately bought by Boohoo Group for about £55 million in 2021.
Structure: A Company Voluntary Arrangement (CVA) in 2019 to cut store rents, followed by administration in April 2019 that wiped out Sports Direct's equity stake and handed control to lenders, then a second administration in December 2020, ending in full liquidation in 2021.
The thesis: Lenders and administrators sought first to restructure Debenhams' rent burden and keep it trading, then, once COVID-19 collapsed footfall, to salvage the brand and online business even as the physical retailer was wound down.
What actually happened: All roughly 124 UK stores closed with the loss of about 12,000 jobs; a rescue attempt involving JD Sports and Mike Ashley's Sports Direct fell through, and only the brand name and website survived, under Boohoo's ownership as an online-only operation.
Why it's in the encyclopedia: Illustrates the UK CVA (a court-sanctioned rent-cutting composition short of full insolvency) and administration used in sequence, ending in the same brand-only survival pattern seen in Barneys and Bed Bath & Beyond.
Arcadia Group administration (2020)
Value: ASOS paid approximately £330 million for the Topshop, Topman, Miss Selfridge and HIIT brands (February 2021); Boohoo paid approximately £25.2 million for the Dorothy Perkins, Wallis and Burton brands — both brand/online purchases, not the stores.
Structure: Administration (November 2020), following a 2019 CVA that had already cut rents and pension contributions; Deloitte as administrator sold the constituent brands piecemeal rather than the group as a whole.
The thesis: With roughly 13,000 jobs and 444 stores at risk, administrators sought the highest achievable recovery by separating Arcadia's valuable online brands from its loss-making physical estate.
What actually happened: Virtually all stores closed; only the brand names and online operations were sold on, to ASOS and Boohoo respectively. Arcadia's pension scheme deficit, reported around £350 million, was assumed by the UK Pension Protection Fund. Owner Sir Philip Green faced sustained public criticism over dividends extracted from the group in prior years.
Why it's in the encyclopedia: A second, larger UK example of administration used to strip brands from a dying physical retailer, and a case study in pension-scheme risk when a controlling shareholder has extracted value ahead of collapse.
Revlon Chapter 11 (2022-2024)
Value: Filed with roughly $3.5-3.7 billion in debt; the confirmed plan converted the great majority of that funded debt to new equity.
Structure: A pre-petition liability-management dispute (2020 "BrandCo" transaction, in which a majority lender group received new priming debt secured by Revlon's intellectual-property "BrandCo" entities, subordinating non-participating lenders) preceded a full Chapter 11 filing in June 2022; the confirmed plan was a debt-for-equity reorganization.
The thesis: Revlon, heavily indebted under controlling shareholder MacAndrews & Forbes (Ron Perelman), first sought new financing through the 2020 BrandCo maneuver to buy time, then used Chapter 11 to delever fully once supply-chain and inflation pressures made the balance sheet unsustainable.
What actually happened: The 2020 BrandCo transaction triggered major creditor-on-creditor litigation and a widely publicized episode in which administrative agent Citibank mistakenly wired excluded lenders the full principal balance rather than an interest payment. The 2023 confirmed plan handed ownership of the reorganized Revlon to former first-lien and BrandCo lenders, wiping out MacAndrews & Forbes' equity.
Why it's in the encyclopedia: Combines a priming/liability-management fight with a full Chapter 11 in one company's history, and produced one of the best-known agent-error episodes in leveraged-loan administration.
Bed Bath & Beyond Chapter 11 (2023)
Value: Approximately $21.5 million, paid by Overstock.com for the Bed Bath & Beyond and buybuy Baby brand names and intellectual property.
Structure: Section 363 sale following an April 2023 Chapter 11 filing; no going-concern buyer emerged for the retail operations, so the estate liquidated essentially all remaining stores and sold only the brand names.
The thesis: Having failed to complete a prior 2023 rescue equity raise, Bed Bath & Beyond's estate sought to preserve some value from its well-known brand names even as the physical chain was unsalvageable.
What actually happened: All roughly 360 remaining stores were liquidated. Overstock.com bought the brand IP and relaunched an online-only "Bed Bath & Beyond," later renaming its own corporate entity to Bed Bath & Beyond Inc.
Why it's in the encyclopedia: A near-identical brand-harvest outcome to Barneys and Debenhams, showing the pattern had become the default endgame for failed big-box and specialty retailers by the early 2020s.
Chesapeake Energy Chapter 11 (2020-2021)
Value: Filed with roughly $9-9.7 billion in debt; the confirmed plan reduced debt by approximately $7.7 billion.
Structure: Chapter 11 debt-for-equity reorganization — essentially all funded debt converted to new equity in the reorganized company.
The thesis: Lenders and noteholders sought to delever a shale-gas producer whose balance sheet could not be sustained through the 2020 commodity-price collapse, having already required a major refinancing in prior years.
What actually happened: Existing common shareholders were wiped out; Chesapeake emerged in February 2021 with sharply reduced leverage and its equity held by former secured and unsecured creditors, including Franklin Templeton and GoldenTree.
Why it's in the encyclopedia: A leading example of the shale-era "second restructuring" pattern, where a company that survived one debt crisis through refinancing could not survive the next without a full equity conversion.
Peabody Energy Chapter 11 (2016)
Value: The confirmed plan eliminated approximately $5 billion of debt.
Structure: Chapter 11 reorganization converting the bulk of funded debt into new equity and new debt for creditors.
The thesis: The largest US coal producer sought to survive the mid-2010s collapse in coal prices and demand by restructuring its balance sheet rather than liquidating.
What actually happened: Filed Chapter 11 in April 2016; existing shareholders were largely wiped out, retaining only a small stake and warrants, while creditors received the bulk of new equity. Peabody emerged in April 2017.
Why it's in the encyclopedia: One of a cluster of marquee mid-2010s coal-sector Chapter 11s (alongside Arch Coal and Alpha Natural Resources) illustrating balance-sheet restructuring in a structurally declining, stranded-asset industry.
Seadrill Chapter 11 — first and second filings (2017 and 2021)
Value: The 2017-2018 restructuring cut roughly $3.5 billion of debt and lease commitments and raised about $1.06 billion of new capital; the 2021 restructuring converted essentially all of Seadrill's remaining approximately $5.7 billion of debt to equity.
Structure: Two separate Chapter 11 reorganizations by the same offshore-drilling group, controlled by John Fredriksen, five years apart — a "Chapter 22."
The thesis: In each case, Seadrill and its creditors sought to right-size a fleet and balance sheet built for a high offshore-rig-utilization environment that had collapsed with oil prices, while Fredriksen's Hemen Holding sought to preserve some ownership continuity.
What actually happened: The first case (filed September 2017, emerged July 2018) unusually let existing shareholders retain a minority stake alongside new capital from Hemen and creditors. That equity did not survive the second downturn: the 2021 case (filed February, emerged 2022) wiped out the post-2018 shareholders, including Fredriksen's stake, converting virtually all debt to equity.
Why it's in the encyclopedia: A textbook "Chapter 22" showing that a first restructuring's negotiated equity retention can still be erased by a second cyclical downturn.
Pacific Gas & Electric — Chapter 11 and Fire Victim Trust (2019-2020)
Value: The confirmed plan funded a Fire Victim Trust with approximately $13.5 billion, split roughly evenly between cash (about $6.75 billion) and PG&E stock (about $6.75 billion, roughly 22.19% of the reorganized company).
Structure: Chapter 11 reorganization in which PG&E, unlike almost every other case in this list, did not fully wipe out or replace its existing equity — the plan instead diluted existing shareholders with new stock issued into the victims' trust.
The thesis: PG&E, facing an estimated $30 billion-plus in wildfire liability from equipment blamed for a series of 2017-2018 Northern California fires (including the Camp Fire), used Chapter 11 to cap and channel that liability into a dedicated trust while remaining a going, regulated utility.
What actually happened: PG&E emerged in July 2020 with the same corporate shell intact, existing shareholders diluted rather than eliminated, and wildfire victims paid partly in company stock whose value depended on PG&E's post-emergence performance — a structure that drew criticism when the stock component's realized value lagged initial estimates.
Why it's in the encyclopedia: The leading precedent for using Chapter 11 to channel mass tort liability from an operating, regulated entity without a change of control, and for paying tort victims partly in the debtor's own equity.
Delphi Corporation Chapter 11 (2005-2009)
Value: Undisclosed as a single consolidated figure; the case ended in a 2009 §363 sale to a creditor group rather than a valued standalone plan.
Structure: A Chapter 11 case (filed October 2005) that ran more than three years through a failed 2007-2008 plan (with hedge fund Appaloosa Management as plan sponsor, which walked away from its funding commitment amid the 2008 financial crisis) before exiting via a Section 363 asset sale in 2009, contemporaneous with and enabled by GM's own bankruptcy.
The thesis: Delphi, GM's former parts division spun off in 1999, sought to shed UAW-scale legacy labor and pension costs it had inherited, first through a negotiated plan, then through an asset sale once that plan's financing collapsed.
What actually happened: The 2009 sale transferred most operations to a group of hedge-fund creditors including Elliott Management and Silver Point Capital, forming a new entity, while GM retained four Delphi plants and assumed certain pension obligations to protect its own supply chain; the remaining shell, DPH Holdings, liquidated.
Why it's in the encyclopedia: Illustrates both the risk that a committed plan sponsor can walk away mid-case and the creditor-led §363 buyout of a strategically critical supplier, run in tandem with its largest customer's own bankruptcy.
Hertz Global Chapter 11 (2020-2021)
Value: The confirmed plan paid legacy common shareholders a combined recovery reported at roughly $1 billion in cash and warrants, after all creditor classes were paid in full — an outcome opposite the near-universal rule that Chapter 11 wipes out common equity.
Structure: Chapter 11 reorganization, filed May 2020 with more than $17 billion of total debt including asset-backed vehicle-fleet financing.
The thesis: Hertz filed to restructure a fleet-financing structure that became unsustainable when COVID-19 collapsed rental-car demand overnight; new sponsors sought to recapitalize the company for the recovery.
What actually happened: A sharp 2021 spike in used-car prices, driven by pandemic-era vehicle shortages, unexpectedly inflated the value of Hertz's fleet collateral well beyond what the case assumed at filing. The resulting recovery was large enough that, after paying creditors in full, the June 2021 confirmed plan still had value left for old shareholders — a rare outcome. Control passed to a new investor group including Certares, Knighthead Capital, and Apollo-affiliated funds, who backed the exit with new capital.
Why it's in the encyclopedia: The standard teaching case for how an unrelated asset-price shock during a case can flip a Chapter 11 from a total-wipeout to a shareholder-recovery outcome.
Serta Simmons Bedding — uptier priming transaction and litigation (2020-2024)
Value: The 2020 transaction issued roughly $200 million of new money plus an exchange of about $875 million of existing debt into new super-priority first-lien debt.
Structure: An "uptier" (priming) transaction: a majority group of Serta's existing first-lien lenders, using majority-amendment provisions in the credit agreement and an "open market purchase" covenant carve-out, agreed with the company to issue new debt that ranked ahead of the collateral position of the minority lenders who were not invited to participate — done without those minority lenders' consent.
The thesis: Advent International-owned Serta and the participating lender majority sought emergency liquidity and a maturity extension in 2020 without a bankruptcy filing, using the credit agreement's own amendment mechanics rather than a consensual, pro-rata restructuring.
What actually happened: Excluded lenders sued, arguing the "open market purchase" exemption was misapplied to what was really a non-pro-rata, insider-negotiated exchange. Serta itself filed Chapter 11 in January 2023. In 2024 the Fifth Circuit ruled in In re Serta Simmons Bedding that the 2020 transaction did not qualify as an open-market purchase and was an improper priming of non-participating lenders.
Why it's in the encyclopedia: The definitive test case on uptier/priming mechanics and creditor-on-creditor conflict, and the leading appellate ruling curbing majority-lender maneuvers that leave minority lenders behind without consent.
Purdue Pharma Chapter 11 and Harrington v. Purdue Pharma (2019-2024)
Value: The Sackler family agreed to contribute an amount that grew across negotiated versions of the plan, from roughly $4.3-4.5 billion to about $6 billion in a 2022 revised deal, in exchange for release from opioid-related civil liability, against an estimated $10-11 billion the family had extracted from Purdue in the decade before filing.
Structure: Chapter 11 reorganization (filed September 2019) whose plan depended on a non-consensual third-party release — releasing the Sacklers themselves, who had not filed for bankruptcy, from civil claims over objections from some claimants and states.
The thesis: Purdue and the Sacklers sought to resolve tens of thousands of opioid lawsuits in one forum and, critically, to extend the shield from litigation to the family's personal assets even though only the company was in bankruptcy.
What actually happened: The bankruptcy court confirmed a version of the plan in 2021; after further negotiation and an increased Sackler contribution, the Supreme Court ruled 5-4 in Harrington v. Purdue Pharma L.P. (June 2024) that the Bankruptcy Code does not authorize non-consensual releases of claims against non-debtor third parties, striking down the plan and sending the case back for renegotiation.
Why it's in the encyclopedia: The landmark ruling eliminating non-consensual non-debtor releases as a tool for resolving mass-tort liability through a debtor's own bankruptcy, reshaping how future mass-tort cases (including asbestos and opioid-adjacent filings) can be structured.
Johnson & Johnson "Texas Two-Step" / LTL Management (2021-2023)
Value: Not a transaction value; J&J provided a funding backstop to LTL Management rather than a market-tested purchase or plan-funding figure.
Structure: A "divisional merger" under Texas law splitting J&J's talc-liability subsidiary into two entities — one (LTL Management LLC) that absorbed the talc tort liabilities plus a funding agreement from J&J, and another that kept the profitable operating assets — with only LTL Management filing Chapter 11 (first October 2021, then again April 2023), while J&J itself never filed.
The thesis: J&J, facing tens of thousands of lawsuits alleging its talc-based baby powder caused cancer, sought to resolve that mass-tort exposure inside a bankruptcy forum, at a fraction of aggregate jury-verdict exposure, without putting the parent company itself into Chapter 11.
What actually happened: The Third Circuit dismissed the first LTL Management case in January 2023 and dismissed the second filing later that year, both times ruling LTL was not in the kind of genuine financial distress bankruptcy is meant to address, given J&J's funding backstop behind it. J&J was forced back into ordinary tort litigation and toward settlement-fund approaches outside Chapter 11.
Why it's in the encyclopedia: The landmark rejection of the "Texas Two-Step" divisional-merger bankruptcy strategy, holding that a solvent parent cannot manufacture "distress" in a liability-only subsidiary to access Chapter 11's tools.
Argentina sovereign debt — holdout litigation, NML Capital v. Argentina (2001-2016)
Value: Argentina's 2001 default covered roughly $95-100 billion of bonds; its 2005 and 2010 exchanges offered holders new bonds worth roughly 25-35 cents on the dollar, accepted by about 92-93% of bondholders. The 2016 settlement paid holdout creditors a reported $9.3-9.7 billion in total, with Elliott Management's NML Capital fund alone recovering about $2.4 billion.
Structure: Not a domestic bankruptcy — a sovereign default followed by voluntary debt-exchange offers, with a holdout minority litigating in US federal court (New York-law governed bonds) rather than accepting the exchange terms.
The thesis: Holdout funds led by Elliott Management's NML Capital bet that litigating for full payment under the bonds' pari passu clause would eventually force Argentina to pay holdouts in full, rather than accept the exchange's steep haircut.
What actually happened: Judge Thomas Griesa ruled in 2012 (upheld by the Second Circuit in 2013, certiorari denied in 2014) that Argentina could not pay exchange bondholders without paying holdouts pari passu, triggering a technical default in 2014 when Argentina refused. The dispute was settled in 2016 under President Mauricio Macri, with Argentina paying holdouts to regain capital-markets access.
Why it's in the encyclopedia: Reshaped how sovereign bonds are drafted worldwide — pari passu language and collective-action clauses were rewritten industry-wide afterward specifically to prevent a repeat of the Argentine holdout strategy.
Value: Restructured approximately €200 billion of privately held Greek government bonds, imposing a reported roughly 53.5% face-value haircut (and a substantially larger net-present-value haircut) on participating private creditors.
Structure: A sovereign debt exchange executed using collective action clauses (CACs) retroactively inserted into Greek-law bonds by Greek legislation, allowing a supermajority vote to bind holdout bondholders to the exchange rather than requiring unanimous consent.
The thesis: Greece and the eurozone/IMF/ECB "troika" sought to make Greece's debt load sustainable enough to justify a second bailout program, using a haircut on private bondholders (rather than official-sector creditors) to reduce the debt stock.
What actually happened: With CACs activated, roughly 97% of eligible bondholders ultimately participated, a coverage ratio holdouts could not escape the way Argentina's holdouts had. The exchange remains the largest sovereign debt restructuring by nominal amount undertaken to that date.
Why it's in the encyclopedia: The template for using retroactive collective action clauses to force high creditor participation in a sovereign restructuring, directly informing how CACs are now standard in most sovereign bond issuance.