Houlihan Lokey Restructuring Interview Questions 2027: Distressed Prep
Houlihan Lokey restructuring interview questions distressed candidates face test what happens when companies can't pay: the options ladder from workouts to Chapter 11, who gets paid in what order, and how valuation works when equity may be worthless. HL runs a world-top restructuring practice — interviewers expect the distressed playbook, not just the healthy-company one.
What Houlihan Lokey Restructuring Interview Questions Distressed Rounds Cover
Houlihan Lokey restructuring interview questions distressed sections in the 2027 intake focus on fundamentals. Expect: "Walk me through a company's options approaching distress," "What is the absolute priority rule," "How does valuation differ for a distressed company," "What is a 363 sale," and "Chapter 11 or out-of-court?" These test whether you can think from the creditor's perspective — a different lens from standard M&A.
Houlihan Lokey Restructuring Interview Questions Distressed Essentials to Master
The options ladder. As distress deepens: operational fixes → amend-and-extend → out-of-court exchange offers → prepackaged bankruptcy → full Chapter 11 → liquidation. Know what each means and when each fits.
Priority of claims. Secured → unsecured → subordinated → preferred → common equity. Absolute priority: senior classes paid in full before juniors receive anything — though juniors often extract some recovery to secure their plan vote.
Distressed valuation. Forget healthy-peer multiples. Value the enterprise (distress-adjusted DCF or distressed comps), then waterfall it down the capital structure: uncovered claims are impaired. If EV covers only secured debt, equity is worthless — say so confidently.
Key mechanics. DIP financing (new money priming existing debt, keeping the company alive in bankruptcy), 363 sales (court-supervised asset sales free and clear of liens), and covenants — know what trips them.
Our 2027 Houlihan Lokey Online Assessment Exact Questions & Answers includes the exact restructuring questions HL asks with model answers for the 2027 intake.
Can't Answer Distressed Questions, Forget the Restructuring Group
This is HL's crown jewel — the group behind the most famous bankruptcies of recent decades. Walking in fluent only in healthy-company M&A tells the interviewer you don't want this seat. Winners can waterfall a capital structure on a whiteboard and argue DIP priming like they've lived it. Check HL's official careers page for 2027 intake timing in your region, and learn the distressed playbook before claiming to want it.
FAQ
What is the absolute priority rule? Senior classes must be paid in full before juniors receive anything — the backbone of bankruptcy distributions, though negotiated deviations are common.
How is distressed valuation different? Healthy multiples often don't apply. Use distress-adjusted DCFs or distressed comps, then waterfall EV down the capital structure to see who's impaired.
What is DIP financing? Debtor-in-possession loans made during bankruptcy that jump ahead of existing debt, funding operations through the process.
Out-of-court vs. Chapter 11? Out-of-court is cheaper, faster, private but needs creditor consensus; Chapter 11 binds holdouts through court but costs more and takes longer.
Preparing for Houlihan Lokey's Restructuring / Distressed? Our 2027 Houlihan Lokey Online Assessment Exact Questions & Answers has the exact questions and answers — $79 one-time, instant download.
