Bankruptcy Advisory: How Restructuring Firms Work

Large U.S. corporate bankruptcy filings reached 785 in 2025, the third straight annual increase, and every one of those companies needed advisors on both sides of the table. Bankruptcy advisory helps financially distressed companies get through a liquidity crisis without running out of cash, often against a timeline measured in weeks. Advisors work out how much time a company has, evaluate its restructuring options, and negotiate with lenders and other creditors, either out of court or in a formal bankruptcy process. It's a specialized corner of investment banking with its own firms, fee structures, and rules on conflicts of interest.

I went to Harvard and worked at McKinsey, and I've run a lot of mock technical interviews with students headed into banking. By the end of this guide you'll know who sits at the table in a restructuring, how the company-side and creditor-side jobs differ, how a case runs from the first cash forecast to court, what the firms charge, and how an undergrad gets into the analyst seat.

What Does a Bankruptcy Advisory Firm Do?

A bankruptcy advisory firm helps a company that can't pay its debts, or the creditors it owes, reach a deal that either keeps the business alive or sells it for the most money possible. That covers three different jobs. Investment banks like PJT Partners and Houlihan Lokey design the new capital structure, negotiate it, and raise the financing. Financial advisors like Alvarez and Marsal and FTI Consulting manage the company's cash and operations through the crisis. Law firms like Kirkland and Ellis draft the deal and fight in court. Every large restructuring has all three advisors on each side of the table, and the bankers are only one of them.

Who Hires Restructuring Advisors, the Company or the Creditors?

Both, and they hire separate teams. The company hires a banker, a financial advisor, and counsel to represent the business. Groups of creditors, usually the lenders who hold enough of a loan to control a vote, hire their own banker, advisor, and counsel to represent their recovery. In a Chapter 11 case, an official committee of unsecured creditors gets its own set of advisors too, paid for by the company. In a big case there can be three or four full advisor teams working the same numbers from different sides, and each one is paid by the bankrupt company's estate.

1. Every Restructuring Has Three Advisor Seats, and Each Does a Different Job

Marelli, the auto parts supplier owned by KKR, filed for Chapter 11 in Delaware in June 2025 with about $4.5 billion of senior loans. Its filings list the full cast. For the company: Kirkland and Ellis as counsel, PJT Partners as investment banker, Alvarez and Marsal as financial advisor. For the group of lenders holding most of the loans: Akin Gump as counsel, Houlihan Lokey as banker, AlixPartners as financial advisor. For Mizuho, the largest single lender, Davis Polk. That's seven firms before the unsecured creditors' committee hired its own.

The banker's job is the capital structure. PJT built the analysis showing what Marelli could afford to owe and designed the deal in which the lenders would convert their loans into ownership. It ran the process to see if anyone would pay more, and it negotiated the $1.1 billion loan that funded the company during the case. Bankers also value the company for the court, because every creditor class argues about what it's worth, and someone has to put a number on the stand.

The financial advisor's job is the business. Alvarez and Marsal built and updated the 13-week cash flow forecast, managed vendors who wanted to be paid up front, prepared the budget the court approved, and handled the operational side of the filing. In many cases the financial advisor also supplies a chief restructuring officer, an executive who takes over the day-to-day crisis management from the existing management team. AlixPartners, FTI Consulting, Ankura, Berkeley Research Group, M3 Partners, Portage Point, and Province do the same work at different scales.

The lawyer's job is everything that has to be written down or argued. Kirkland drafted the restructuring support agreement, the loan documents, the plan of reorganization, and the hundreds of motions a case requires, and stood up in court to defend them. Kirkland, Weil, Davis Polk, Paul Weiss, Latham, Akin, Gibson Dunn, Milbank, Paul Hastings, Ropes and Gray, and White and Case are the names that show up over and over. Bankers own the capital structure, financial advisors own the cash, lawyers own the documents, and no restructuring gets done without all three.

2. Restructuring Lives at Independent Banks Because the Big Banks Are Conflicted

If you've read anything about investment banking, you know Goldman Sachs and JPMorgan run the biggest M&A franchises. They don't run the biggest restructuring franchises, and the reason is structural.

When a company borrows $2 billion, that debt is arranged by the big banks and held partly on their balance sheets. Their research analysts publish ratings on the company's stock. Their trading desks make markets in its bonds. When that company later needs to restructure, every one of those relationships is a conflict. A creditor would never accept advice from a bank that helped create the debt being restructured, and a court would ask hard questions about the bank's independence. So the distressed company goes to a firm with no lending book and no research desk.

That's why the top of the restructuring league table is a list of independent firms. PJT Partners, Houlihan Lokey, Evercore, Lazard, and Moelis are the five that most students target, and Houlihan Lokey reports it ranked first globally with 83 restructuring deals in 2025. Alongside them sit Rothschild and Co, which ranked fourth in that 2025 table, Perella Weinberg, Ducera, Guggenheim Securities, Centerview, and Jefferies. Greenhill was bought by Mizuho in December 2023 and Miller Buckfire is now Stifel's capital structure advisory group, so two names from older lists have moved.

For undergraduates, this distinction changes which firms to target. Unlike M&A, restructuring advisory is largely handled by independent advisory firms rather than the major lending banks. Because lending banks often represent creditors on the other side of a restructuring, they face conflicts of interest that make it difficult to advise the distressed company. As a result, independent advisory firms dominate the restructuring market, and those firms should be the primary focus of your recruiting list.

3. The Company Side and the Creditor Side Are Different Jobs

The same banker can work either side of a case, but the two engagements feel nothing alike.

On the company side, usually called the debtor side once the company files, the advisor's client is the business. The goal is to keep it operating, preserve as much value as possible for everyone with a claim, and, if the sponsor and management have their way, keep some of that value for the equity. The company-side banker runs the process: builds the business plan, sets the timeline, talks to every creditor group, and negotiates the deal. In First Brands' case, filed in September 2025, that meant Weil as counsel, Lazard as banker, and Alvarez and Marsal as financial advisor.

On the creditor side, the client is a group of lenders. Most often it's an ad hoc group, which is an informal coalition of funds that hold enough of a loan or bond to matter, formed for this case only. Davis Polk, which represents a lot of these groups, says it often represents the fulcrum creditor group "that will own the restructured company," which tells you what the assignment is. The creditor-side banker's job is to tear apart the company's business plan, argue for a lower valuation if the group is senior and a higher one if it's junior, and negotiate the best recovery for that class. In First Brands, the ad hoc group of first-lien lenders hired Gibson Dunn and Evercore for that fight.

The third client is the official committee of unsecured creditors, called the UCC. Under the Bankruptcy Code, the U.S. Trustee appoints a committee from the largest unsecured creditors, typically the seven biggest, and the committee can hire its own lawyers, banker, and financial advisor with the court's approval, all paid by the company. The UCC exists to make sure the secured lenders and the company don't split the value between themselves and leave the trade creditors, bondholders, and landlords with nothing. Committees also object to the other advisors' fees, and courts sometimes cut them.

Houlihan Lokey built the largest creditor-side practice on the Street. Evercore and PJT are strong on both. A candidate who can explain why a first-lien group wants a low valuation and an unsecured committee wants a high one has understood the whole business. On the company side you're trying to save the business; on the creditor side you're trying to get paid; and the valuation each side argues for follows directly from where it sits in the capital structure.

4. The 13-Week Cash Flow Is the First Deliverable, and Everything After It Depends on the Number

A restructuring engagement begins with one question: how long does this company have? The tool that answers it is the 13-week cash flow forecast.

The forecast is a weekly model, usually built by the financial advisor, that starts with the cash in the bank today and projects every receipt and every disbursement for the next quarter. Receipts are collections from customers. Disbursements are payroll, rent, suppliers, interest, taxes, and, once the advisors are hired, professional fees. The end result is a week-by-week projection of the company's cash balance, showing how quickly it could run out of cash.

Here's a simple one. A company has $40 million in the bank. It collects $25 million a week from customers and pays out $30 million a week, so it burns $5 million a week. Its revolver is frozen, so there's nothing to draw. Week one ends at $35 million, week two at $30 million, and by week eight the balance is zero. That company has eight weeks, and if a $15 million interest payment is due in week six, it runs out of cash that week.

Every decision flows from that number. If the runway is eight weeks, there's no time for a leisurely sale process; the company needs a deal with its existing lenders, fast, or a bankruptcy financing package ready to go. If the runway is thirty weeks, the bankers can run a real auction. The forecast also tells the lenders how much a bankruptcy loan needs to be, because the loan has to cover the lowest point on the line plus a cushion. And once the case is filed, the forecast becomes the budget the court and the lenders hold the company to, week by week.

The 13-week cash flow tells the advisors how long they have, and how long they have decides what kind of deal is possible.

5. The Playbook Runs From Options Analysis to a Deal to a Court Process

Every case is different, but the sequence of work is the same enough that you can learn it.

First comes the diagnosis. The financial advisor builds the cash flow forecast and the banker builds a view of the business: what it will earn, what it can afford to owe, and what it's worth. The gap between what it owes and what it can afford is the problem the restructuring has to solve.

Second comes the options analysis. The banker lays out the ways to close that gap, from least to most drastic. An amendment and extension pushes maturities out and buys time. A liability management exercise raises new money from a subset of lenders using the loan documents. A sale of the company or a division brings in cash. A prepackaged Chapter 11, where creditors vote on the plan before the filing, uses the court to bind holdouts quickly. A free-fall Chapter 11, with no deal in place, is the last resort. Each option gets a recovery analysis showing what every creditor class would get.

Third comes the negotiation. The company's advisors take the preferred option to the creditor groups, whose advisors push back with their own numbers. If it works, the parties sign a restructuring support agreement, a contract in which creditors holding enough of each class commit to vote for the plan. Frontier Communications' 2020 agreement, signed by holders of more than 75 percent of its bonds before it filed, is a standard example.

Fourth comes the filing, if one is needed. The first day of a Chapter 11 case is a burst of motions: approval of the bankruptcy loan, permission to keep paying employees and critical suppliers, and dozens of administrative requests. The advisors have prepared all of it in advance.

Fifth comes the plan. The company files a plan of reorganization and a disclosure statement explaining it, creditors vote by class, and the court holds a confirmation hearing where the valuation fight, if there is one, gets decided. Or, instead of a plan, the company runs a sale under Section 363 of the Code, with the banker marketing the business and the court approving the winning bid. Sixth, the company emerges, often with new loans the banker raised to fund it, and the advisors send their final invoices.

The timeline depends on how much was agreed before filing. A prepack can be confirmed within a few months; Wolfspeed filed on June 30, 2025, had its plan confirmed on September 8, and was out by September 29. A prearranged case with a support agreement usually takes three to six months; Spirit Airlines' first case ran 114 days. A contested case takes a year or more; Hertz and Frontier each took about 13 months, and Intelsat about 21. The restructuring playbook is diagnosis, options, negotiation, and then either a signature or a filing, and how much gets agreed before the filing decides whether the case takes a few months or two years.

6. How Bankruptcy Advisory Firms Get Paid: Monthly Fees, Success Fees, and Hourly Rates

Restructuring advisors are paid by the company. In a Chapter 11 case, every advisor has to be approved by the bankruptcy court under Section 327 of the Code, and every fee under Sections 328 and 330. Section 327 requires the professionals to be disinterested, and Section 330 lets the court cut fees that aren't reasonable. Because the applications are public, you can see exactly what the firms charge.

Investment banks charge a monthly fee plus a success fee, paid when the restructuring deal closes, and often a financing fee set as a percentage of any new debt or equity they raise. The retention applications, which are public on the claims agents' websites, set out each of these terms.

Financial advisors and lawyers bill by the hour. Their hourly rates are listed in the same public filings.

With large teams billing for a year or more, advisor fees in a big case add up quickly, and they're paid ahead of nearly every other claim, as administrative expenses of the estate. It's also why a first-year analyst, whose work the estate is paying for, is expected to be useful from the first week. Restructuring bankers earn a monthly retainer plus a success fee when the deal closes, and the terms are disclosed in public court filings anyone can read.

7. The Market Is the Busiest Since 2010, and It's Busy on Both Sides

Restructuring is the one group in banking that gets busier when the economy gets worse, and it has been busy for three years running.

S&P Global Market Intelligence counted 694 large U.S. corporate bankruptcy filings in 2024, the most since 2010. Then 785 in 2025, more still, and the third straight annual increase. The first half of 2026 brought 372, the highest first half since 2010. On top of the filings sit the out-of-court deals, including liability management exercises, and every one of them needed advisors on both sides.

The cases are also getting more complicated, which is good for the advisors and bad for everyone else. Saks Global did an exchange in August 2025 and filed for Chapter 11 five months later. Del Monte did a drop-down deal in August 2024, settled with the lenders it left out for $122 million, and filed in July 2025. First Brands filed in September 2025 with a $4.4 billion bankruptcy loan, had its plan rejected in late August 2026, and was converted to a Chapter 7 liquidation. Each of those cases employed a full cast of banks, advisors, and law firms, some of them twice.

Restructuring is counter-cyclical, and after 785 bankruptcies in 2025 and the highest first-half count since 2010, restructuring advisors are among the busiest people in finance.

8. What an Analyst Does, and How You Get the Seat

The analyst's role in a restructuring group is to provide the financial analysis that drives the entire restructuring process. You build and update the company's liquidity model alongside the financial advisor, tracking its cash position and projecting how long it can continue operating. You also prepare recovery analyses that allocate the company's value across its capital structure, showing what each class of creditors would recover under different valuation scenarios. You build the presentation the bankers use to walk a lender group through the options. You size the bankruptcy loan from the cash flow forecast. You run the valuation, the DCF and the comparables, that supports the plan in court. And you read the docket every morning, because in a live case the facts change daily.

That's more modeling than an M&A analyst does, and different modeling: the deliverable is a recovery waterfall, not a merger model. It's also more reading. A first-year in restructuring learns to read a credit agreement, an intercreditor agreement, and a first-day declaration, because the answer to "what does this lender get" is usually in one of them.

The doors in. The five independent banks run Summer Analyst programs, and each has a careers page: PJT Partners, Houlihan Lokey, Evercore, Lazard, and Moelis. PJT says its U.S. Summer Analyst applications generally open in the spring of the year before the program, so Summer 2028 applications at PJT should open in spring 2027; check each firm's page for its own dates. A Summer Analyst seat at a middle-market bank isn't a dead end, because restructuring groups also hire through full-time recruiting.

The financial advisors hire undergrads too. FTI Consulting posts entry-level consultant roles in its Corporate Finance and Restructuring practice, and its 2027 posting listed pay of $70,000 to $95,000. AlixPartners runs a Turnaround and Restructuring summer internship for undergraduates in New York. Alvarez and Marsal recruits on campus, though its U.S. restructuring analyst hiring is harder to find on its site.

The prep is specific. Stephen Moyer's Distressed Debt Analysis and Michael Gatto's The Credit Investor's Handbook cover the mechanics. The Pari Passu newsletter covers live deals in plain language. And the dockets are free: pull the first-day declaration from Saks or Marelli, which is the company's own account of how it got there, and build the capital structure from it.

The restructuring analyst builds the liquidity model, the recovery waterfall, and the valuation, and the fastest way to get the seat is to have built all three on a real case before you interview.

The Next Step

Read one retention application. The company's investment banker files one in every Chapter 11 case, and it's public on the claims agent's site, so pick a case you follow, such as Saks or Marelli. It shows what the bank was hired to do and how it gets paid. Then read the first-day declaration in the same case. Between those two documents you'll understand bankruptcy advisory better than most people who've only read about it, and you'll have a real case to talk about when an interviewer asks why you want the seat.