WSJ: Firms in Chapter 11 Face Fast Trip to Auction Block
The Wall Street Journal reported that impatient lenders and the stubbornly weak economy are undermining the goal of the bankruptcy process by pressing for a fast trip to the auction block.
The Journal said that banks and other lenders will usually get first dibs on any sales proceeds and, as a consequence, are using their clout to press for a speedy sale. The Journal notes that Chapter 11 bankruptcy filings can be months in the making, leaving lenders impatient for payment. By offering bankruptcy loans that set tight sale deadlines lenders can ensure they won’t have to wait too long.
To read the full Wall Street Journal article, click here.