30 to 40% of those types of restructurings, the so-called distress exchanges, end up in bankruptcy anyway within three years. Only about 10 to 15% as I said, of zombie companies actually recover. So if you're using models like mine or maybe others that are out there to assess the future of distress companies, the outlook is certainly bleak.
In this week’s Primary View podcast, Dr. Edward Altman, the legendary bankruptcy expert, discusses the outlook for debt-saddled zombie companies with Reorg reporter Gaurav Sharma. The New York University professor, best known for the Z-Score formula, cautions that bankruptcy cases are likely to increase in 2024-25, even if the U.S. avoids a recession.
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