In a recent interview with Octus, Restructuring Department Co-Chair Sunny Singh discussed how chapter 11 is increasingly being used to facilitate sales, ownership transfers and other transactions rather than the operational turnarounds that historically defined many corporate restructurings.

“A lot of people are thinking to themselves, ‘I’m going to use chapter 11 as a tool to implement a turnover of the keys, a sale, and then fix the operations after I’ve emerged,’” Sunny told Gaurav Sharma, senior reporter at Octus. That represents a significant shift from the traditional purpose of chapter 11, he noted, which historically gave companies the time and flexibility to address operational challenges while under court protection.

Sunny also discussed the growing importance of liquidity management during chapter 11 cases and the rise of administrative insolvency concerns, which he described as an increasingly common focus for restructuring professionals. The interview explored how tighter financing conditions, complex capital structures and limited access to cash are reshaping the way companies, lenders and advisers approach the restructuring process.