NewsWire--JANUARY 16, 2001

Topic: Financial Distress and Restructuring

Source: "Rich Crop of Troubled Firms is Ripening," by Paul M. Sherer and Nikhil Deogun, Wall Street Journal, Friday, January 12, 2001, page C1.

Synopsis of Article: The article discusses the increase in distressed debt and issues surrounding restructuring corporations in financial distress. It provides an opportunity to discuss debt credit ratings, financial distress, and bankruptcy/restructuring.

Questions and Teaching Note:

1. What factors are leading to an increased interest in financial restructuring?
2. How are bond ratings determined?
3. What happens when a company defaults on its debt and enters a state of financial distress?

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