The lessons learned from early liability management exercises — nearly all of which found themselves in bankruptcy or some subsequent restructuring — was not that they didn’t work, it was that they needed work.

A 9fin review found that while 14 of the first 20 LMEs tracked through the end of 2021 wound up in bankruptcy or some other restructuring within four years, if you spread that out through the end of 2024, nearly 70% have successfully managed liabilities thus far, meaning there has been no subsequent LME or bankruptcy.

Of the 30% of the LMEs that did wind up restructuring within four years of the initial LME, 78% of those companies filed for bankruptcy, while the remainder pursued another LME.