Financial Distress, Bankruptcy and Restructuring


This course develops the framework for evaluating the gains, costs, and risks of managing firms’ assets and liabilities in financial distress, including periods of formal bankruptcy and restructuring. It takes the perspective of managers as well as that of financial market participants ? e.g., investors, analysts, legal professionals, regulators ? that monitor and evaluate corporate policies in distress situations. The course will do so going beyond standard textbook coverage, making sense of available research on financial distress, bankruptcy and reorganizations, looking at what professionals think via surveys, and studying real- world examples. We will also have visitors from the industry coming to our class. All of these elements are integrated and analyzed with rigorous methodology. Yet, our goal is to understand the various objectives economic agents ultimately mean to achieve given the institutional constraints they face.

General characterization





Responsible teacher

Murillo Campello


Weekly - Available soon

Total - Available soon

Teaching language



Available soon


•    Bankruptcy and Restructuring at Marvel Group / Harvard Business School, Reference: 9-298-059
•    UAL, 2004: Pulling Out of Bankruptcy / Harvard Business School, Reference: 9-205-090

Teaching method

I have prepared slides for my lectures and this set will work as the reference materials for the course. Students should read the lecture notes before each class. Additional reading materials may later be posted online. We will also use a few HBS case studies (more details below). Importantly, I’ll be talking in class about the news of the day related to our course material. I recommend that you read financial newspapers such as the Wall Street Journal or the Financial Times. I’ll refer to news in these and other news outlets almost every time we meet. Slides are posted on Moodle.

Evaluation method

Your final grade will be based on a set of points accumulated throughout the course. The final grade schedule will follow standard procedure. I will place little emphasis on absolute performance in setting the grade, instead relative performance is emphasized. Grades are assigned to various activities as follows:
•    Exams: We will have a mid-term exam as well as a final exam. The exams assume that the student has knowledge of all course materials covered until that point. The mid-term will account for 25% of your grade. The final exam will account for 45% of your grade.
•    Case Studies: Case studies are not simple follow-ups of class notes, instead you’ll need insights from various areas of finance to solve them. I choose cases so that solving them is more of a learning experience (of new materials) than any sort of test (on old materials). When working on a case, you may look for external sources of general information. However, you must consider only information known to decision-makers at the time a decision is being made. Cases ought to be worked out in groups of 3 to 5 students (no exceptions). We will have 2 cases, each accounting for 15% of your grade (total of 30%).

Subject matter

Lecture: Introduction / Firms, Contracts & Incentives
Lecture Debt / Financial Distress / Out-of-Court Restructuring
Mid-Term Exam
Lecture: Bankruptcy & Restructuring
Cases: Marvel / UAL
Final Exam