CIRA cheat sheet

Automatic stay under 11 U.S.C. §362 arises upon petition filing and bars collection, foreclosure, and lien enforcement against the debtor or estate property.

Chapter 7 liquidation: trustee appointed, non-exempt assets sold, distribution follows §726 priority; individual debtors receive discharge unless §727 objections apply.

Chapter 11 reorganization: debtor-in-possession retains control; exclusivity period for filing a plan is 120 days, extendable to 18 months under §1121(d).

Chapter 13 wage-earner plan: debt limits are $2,750,000 for combined secured and unsecured debts (adjusted April 2022); plan runs 3 to 5 years.

Means test under §707(b): current monthly income compared to state median; above-median debtors apply the disposable income test over 5 years.

Preference under §547: transfer to creditor within 90 days (1 year for insiders) while insolvent, enabling creditor to receive more than in Chapter 7; defenses include ordinary course and new value.

Fraudulent transfer under §548: actual intent or constructive (reasonably equivalent value plus insolvency) within 2 years, or longer under applicable state law.

Priority order under §507: administrative expenses, gap claims, employee wages up to $15,150 per employee (2022 cap), contributions to benefit plans, then unsecured claims.

13-week cash flow forecast: weekly receipts minus disbursements equals net cash flow; cumulative minimum balance identifies liquidity gap and borrowing need.

Z-score (Altman): 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5, where X1=working capital/assets, X2=retained earnings/assets, X3=EBIT/assets, X4=market equity/liabilities, X5=sales/assets; below 1.81 signals distress.

Operational turnaround levers: cost reduction, working capital release (DSO, DIO, DPO), pricing, and asset divestiture; financial levers: debt restructuring, covenant relief, and new money.

Covenant analysis: maintenance covenants tested quarterly; incurrence covenants tested on transactions; headroom equals actual minus covenant threshold divided by threshold.

Stakeholder waterfall: secured creditors, administrative and priority claims, unsecured creditors, then equity; absolute priority rule governs Chapter 11 cramdown.

DIP financing: super-priority lien and carve-out for professional fees; budget and milestones (sale, plan confirmation) are typical conditions.

Distressed M&A: §363 sale free and clear of liens and claims; stalking horse bid with break-up fee and overbid procedures; credit bid by secured lender permitted under §363(k).

Enterprise value = market capitalization + debt + preferred stock + minority interest − cash and equivalents; used for EV/EBITDA and EV/Sales multiples.

DCF: EV = Σ FCFF_t / (1+WACC)^t + terminal value; terminal value via Gordon growth = FCFF_{n+1}/(WACC−g) or exit multiple.

WACC = (E/V)×Re + (D/V)×Rd×(1−tax rate); Re via CAPM = risk-free rate + beta × equity risk premium + size premium.

Adjusted EBITDA: EBITDA plus non-recurring items, stock compensation, restructuring costs, and run-rate synergies; lenders cap add-backs (commonly 25% of EBITDA).

Valuation multiples: EV/EBITDA, EV/EBIT, P/E, and price/book; select comparable companies by size, growth, margin, and capital structure.

Recovery analysis: collateral value determined by orderly liquidation or forced liquidation value; deficiency claim equals debt minus collateral value.

Solvency tests: balance sheet (assets at fair value exceed liabilities), equitable (ability to pay debts as due), and adequate capital.

Proof of claim under Bankruptcy Rule 3001: filed on Official Form 410 with supporting documents; deadline set by court, commonly 70 days after petition date in Chapter 11.

Claim objection under §502: grounds include lack of documentation, duplicate claim, and contingent or unmatured claim; burden shifts to claimant after prima facie validity.

Administrative expense claim under §503(b): post-petition goods or services that benefit the estate; must be timely filed and noticed.

Setoff under §553: mutual debts between debtor and creditor before petition; preserved unless claim is disallowed or transfer occurred within 90 days.

Reclamation under §546(c): seller may reclaim goods received within 45 days before petition if written demand made within 45 days after receipt or 20 days after petition.

Claims priority: secured claims paid from collateral; §507 priorities; general unsecured claims pro rata; subordinated claims paid after unsecured.

Discharge and dischargeability: §523 exceptions (fraud, false financial statement, willful injury) require adversary proceeding; §727 denial for concealment or failure to keep records.