Restructuring Model

The template’s Assumptions tab collects the primary drivers for the restructuring model. It starts with LTM financials and five creditor classes: first-lien term debt, first-lien notes, second-lien notes, unsecured bonds and trade/other claims.

• Each class has a haircut percentage plus equity-conversion and cash-paydown percentages. Reinstated debt is calculated as claim times (1 minus haircut) times (1 minus equity percentage minus cash percentage).
• DIP and exit debt terms, equity funding, tax/NOL parameters, annual revenue growth, expense ratios, working-capital days and covenant thresholds are also entered here. Annual revenue grows from LTM revenue, and COGS, SG&A and other operating expenses use revenue-based ratios, so the operating forecast reacts to revenue assumptions.

These inputs feed the restructuring bridge and the five-year forecast, allowing a reader to trace how creditor treatment choices influence later debt, coverage and recovery outcomes.

Reinstated debt = claim × (1 − haircut) × (1 − equity percentage − cash percentage)Copy

The model’s calculation flow begins when Assumptions feed the Pre_Restructuring bridge, which produces exit debt and CODI. From there, the Debt_Schedule calculates senior debt amortisation, DIP amortisation, revolver interest and total debt.

• Senior interest uses average opening and closing debt, while DIP repays a fixed original-principal/tenor amount. The Income_Statement, Cash_Flow and Balance_Sheet tabs then build a five-year operating forecast.
• Debt interest feeds earnings, while earnings and working-capital movements feed cash and the balance sheet. NOL usage is limited by positive taxable income, the utilisation percentage, opening NOL and an equity-value-times-rate limit.

The Cash_Flow reverses noncash CODI and includes receivable, inventory and payable movements. Finally, Recovery_Analysis and the Dashboard read these schedules to present plan recoveries and a summary comparison of pre-petition and post-emergence debt, leverage, blended recovery, liquidity runway, new equity and projected operating results.

The template’s main outputs focus on creditor recoveries and liquidity. Recovery_Analysis provides a sequential liquidation waterfall that distributes available assets after administrative costs, alongside plan recoveries by class and reorganised equity ownership.

• A recovery sensitivity grid changes the final-year EBITDA margin and EV/EBITDA multiple, showing a simplified recovery ratio rather than rerunning the full creditor waterfall. The Dashboard summarises pre-petition versus post-emergence debt, leverage, blended recovery, liquidity runway, new equity and projected operating results.
• Checks cover balance, liquidity, sources and uses, debt, covenants, NOL and liquidation comparison tests. These outputs let a reader compare proposed creditor treatment with liquidation outcomes and review the annual forecast across the implemented period from 2026 to 2030.

The sensitivity grid is deliberately simplified and does not replace the detailed waterfall.

This restructuring model is designed for evaluating distressed situations where creditor treatment, exit debt and a five-year operating turnaround need to be considered together. A reader can trace how haircuts, equity conversions and cash paydowns affect reinstated debt, how DIP and exit facilities influence interest and coverage, and how plan recoveries compare with liquidation.

• However, the template has documented limitations. The senior schedule has no maturity balloon: amortisation stops after the input tenor even if debt remains, and the revolver draw stays constant.
• It does not promise automatic refinancing, cash sweeps or calculated time to full repayment. Sources and uses balance through a cash plug, opening cash in Cash_Flow does not incorporate that plug, and first-year reorganised equity is also a balancing plug.
• Pre-petition and forecast leverage use different definitions (net versus gross debt/EBITDA). DSCR adds tax back to the numerator instead of deducting cash tax, overstating coverage when tax is payable.
• Tax calculations are simplified, opening inventory and payables are zero in the cash bridge, and year-one D&A uses the LTM amount. Sample rates and values are illustrative, not market benchmarks.

Recovery treatment is input-driven; the workbook does not establish legal priority, plan approval or actual creditor investment IRRs.