Restructuring IB Interview Prep
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is restructuring in investment banking?
✔✔ Advising companies on reorganising capital structure, operations, or debt to improve
financial stability
Why do companies enter restructuring?
✔✔ Due to financial distress, liquidity issues, or unsustainable debt
What is financial distress?
✔✔ A situation where a company struggles to meet its financial obligations
What is operational restructuring?
✔✔ Changes to business operations to improve efficiency and cash flow
What is balance sheet restructuring?
✔✔ Adjusting debt and equity to stabilise the company
What is a creditor?
✔✔ A party that is owed money by the company
1
,What is a debtor?
✔✔ A company or individual that owes money
What is Chapter 11 bankruptcy?
✔✔ A US legal process allowing companies to reorganise while operating
What is Chapter 7 bankruptcy?
✔✔ Liquidation of company assets to repay creditors
What does “out-of-court restructuring” mean?
✔✔ Negotiating with creditors without formal bankruptcy proceedings
Why do firms prefer out-of-court restructuring?
✔✔ It is faster, cheaper, and less disruptive
What is a debt haircut?
✔✔ A reduction in the principal amount owed
What is debt rescheduling?
✔✔ Extending repayment timelines to ease cash flow pressure
What is debt-to-equity conversion?
2
, ✔✔ Converting debt into company shares
Why would creditors accept equity instead of cash?
✔✔ To recover value if the company improves
What is a standstill agreement?
✔✔ A temporary pause on debt enforcement actions
What is liquidity?
✔✔ The ability to meet short-term obligations
What is cash flow restructuring?
✔✔ Improving inflows and reducing outflows to stabilise operations
What role does an investment bank play in restructuring?
✔✔ Advising on strategy, negotiations, and valuation
What is a restructuring advisor?
✔✔ A specialist guiding distressed companies or creditors
What is DIP financing?
✔✔ Financing provided during bankruptcy to support operations
3
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What is restructuring in investment banking?
✔✔ Advising companies on reorganising capital structure, operations, or debt to improve
financial stability
Why do companies enter restructuring?
✔✔ Due to financial distress, liquidity issues, or unsustainable debt
What is financial distress?
✔✔ A situation where a company struggles to meet its financial obligations
What is operational restructuring?
✔✔ Changes to business operations to improve efficiency and cash flow
What is balance sheet restructuring?
✔✔ Adjusting debt and equity to stabilise the company
What is a creditor?
✔✔ A party that is owed money by the company
1
,What is a debtor?
✔✔ A company or individual that owes money
What is Chapter 11 bankruptcy?
✔✔ A US legal process allowing companies to reorganise while operating
What is Chapter 7 bankruptcy?
✔✔ Liquidation of company assets to repay creditors
What does “out-of-court restructuring” mean?
✔✔ Negotiating with creditors without formal bankruptcy proceedings
Why do firms prefer out-of-court restructuring?
✔✔ It is faster, cheaper, and less disruptive
What is a debt haircut?
✔✔ A reduction in the principal amount owed
What is debt rescheduling?
✔✔ Extending repayment timelines to ease cash flow pressure
What is debt-to-equity conversion?
2
, ✔✔ Converting debt into company shares
Why would creditors accept equity instead of cash?
✔✔ To recover value if the company improves
What is a standstill agreement?
✔✔ A temporary pause on debt enforcement actions
What is liquidity?
✔✔ The ability to meet short-term obligations
What is cash flow restructuring?
✔✔ Improving inflows and reducing outflows to stabilise operations
What role does an investment bank play in restructuring?
✔✔ Advising on strategy, negotiations, and valuation
What is a restructuring advisor?
✔✔ A specialist guiding distressed companies or creditors
What is DIP financing?
✔✔ Financing provided during bankruptcy to support operations
3
