Pre-Filing Preparation: RSAs, DIP Shopping, and Stakeholder Outreach

Introduction

Most sophisticated Chapter 11 cases are won or lost before the petition is filed. The months of pre-filing preparation that precede a high-quality bankruptcy filing produce three deliverables that together determine the case's trajectory: a restructuring support agreement (RSA) signed by enough creditors to deliver plan-confirmation votes, a debtor-in-possession (DIP) facility committed and ready for first-day approval, and a comprehensive first-day motion package that lets the company continue operating without disruption from the moment the automatic stay attaches. The strongest cases enter court with all three already locked down; the weakest free-fall filings enter court with none of them.

The work behind these deliverables is intense and largely invisible from outside. The advisor team divides the workload:

On the creditor side, ad hoc groups form and retain their own RX bank and counsel; the secured-lender steering committee organizes; potential DIP lenders run diligence; minority creditors decide whether to coordinate defensively. The pre-filing phase is the negotiation phase, and the resulting deal terms get baked into the case at filing.

This article walks through the three pre-filing workstreams (RSA negotiation, DIP shopping, stakeholder outreach), the documentation that gets produced, the timing and sequencing across the workstreams, the dual-track contingency planning that runs in parallel with an out-of-court alternative, and the recent precedents (CURO, Enviva, Mallinckrodt, Wolfspeed) that illustrate how the work plays out in practice.

Pre-filing preparation is the comprehensive set of legal, financial, and stakeholder work that occurs in the weeks or months before a Chapter 11 petition is filed. The defining characteristic is that the work happens outside court supervision: there is no automatic stay, no judge, no U.S. Trustee, and no procedural deadlines other than those the parties impose on themselves. The negotiating leverage and information asymmetries that exist before filing are very different from those that exist after, which is why so much of the strategic work concentrates in this phase.

Pre-Filing Preparation (Pre-Petition Work)

The pre-petition phase of a Chapter 11 case during which the debtor, working with its RX bank and counsel, negotiates terms with key stakeholders, sources DIP financing, drafts the petition and first-day motion package, and coordinates the dual-track contingency planning between an out-of-court restructuring alternative (LMT, DEO, debt-for-equity swap) and an in-court Chapter 11 backstop. The phase typically runs 3-9 months for prepackaged or pre-arranged cases and a few weeks for emergency free-fall filings. The principal deliverables are an executed restructuring support agreement (RSA), committed DIP financing, a Day-1-ready first-day motion package, and creditor coalitions sufficient to deliver plan confirmation votes once the case is filed.

The phase typically begins when the company's board concludes that some form of restructuring is needed and authorizes the engagement of an RX bank and bankruptcy counsel. The early weeks focus on diagnostic work: capital structure review, 13-week cash flow modeling, contract analysis, valuation, and identification of the specific maturity, covenant, or liquidity triggers driving the restructuring. The middle weeks shift to strategic work: negotiating with major creditor classes, shopping the DIP, drafting the petition documentation, and conducting outreach to other stakeholders. The final weeks focus on closing: executing the RSA, finalizing the DIP commitment, completing the first-day motions, and choosing the filing date.

A typical sophisticated pre-filing process runs through a defined sequence over 12-26 weeks.

The CRO role deserves particular attention. A CRO is a senior officer of the company given broad powers to oversee all aspects of the restructuring. Most CROs assess the company's cash and liquidity through a 13-week cash flow forecast, develop profit-improvement initiatives, raise capital, manage stakeholder communication, and contribute to the plan of reorganization. The CRO often serves as the key witness on first-day declarations and at the confirmation hearing, with their credibility a material factor in court approval of the plan.

The restructuring support agreement is the single most consequential pre-filing document. An RSA is a binding contract between the debtor and key creditor classes (typically the secured lender steering committee, the ad hoc bondholder group, sometimes equity sponsors, increasingly an ad hoc lender group representing private credit holders) that commits the signatories to support a specific Chapter 11 plan. The RSA sets out the plan terms in detail: the new capital structure, the treatment of each creditor class, recovery percentages, governance arrangements, exit financing terms, management retention, and the procedural milestones for the case. Once executed, the RSA creates a near-locked path from filing to confirmation, with material penalties for any signatory that breaks ranks.

The level of creditor support an RSA secures determines the case type. An RSA signed by 90%+ of every impaired class typically supports a prepackaged Chapter 11 (where the plan is pre-voted before filing); an RSA signed by 60-80% supports a pre-arranged case (where the plan is negotiated but not pre-voted); an RSA signed only by the secured lender steering committee or by a single major class supports a hybrid or partial-RSA case. The RSA's execution thresholds (often expressed as percentages of the affected debt held by signatories) are the single best metric for evaluating how clean the case is likely to be.

The RSA negotiation runs through diagnostic (weeks 1-4), engagement (weeks 4-12), and execution (weeks 10-18) stages, with the steps block above mapping the parallel workstreams.

A typical modern RSA includes a tightly drafted milestone schedule that maps the case from filing through emergence. The schedule is binding on signatories: missing a milestone gives any signatory the right to terminate the agreement. Recent 2024-2025 RSAs have used milestone schedules in the following form.

Recent specific milestone schedules illustrate the pattern. One 2025 case set milestones at filing of the proposed plan and disclosure statement by December 6, disclosure-statement hearing by January 22, plan confirmation hearing by February 25, and emergence by March 17. Another case set entry of the interim DIP order at January 1, the final DIP order at February 2, the final confirmation order at February 27, and the effective date at March 14.

Backstop fee economics are one of the most negotiated RSA provisions. RSA signatories who backstop the new-money DIP commitment or the post-emergence equity rights offering typically receive substantial fees in exchange for the commitment risk. Recent precedents include closing fees of 5% of the new-money portion plus commitment fees of 10% paid in-kind to backstop parties when the initial term loans fund; 2.5% backstop premiums on new-money DIP commitments; and 8% backstop premiums on post-emergence rights-offering shares. The fees are sized to compensate the backstop parties for the risk of having to fund their full commitment if other holders do not participate. The November 2025 ConvergeOne ruling, however, has put pressure on exclusive backstop arrangements that grant economic value only to specific signatories within a class, with courts increasingly scrutinizing whether such arrangements satisfy the equal-treatment requirement of Section 1123(a)(4).

The Wolfspeed Chapter 11 (June 2025) illustrates how the pre-filing process plays out for a complex multi-stakeholder credit. The pre-petition negotiation timeline ran roughly as follows. May 8, 2025: Wolfspeed disclosed on its quarterly earnings call that it might pursue an in-court solution, marking the public disclosure that an RSA was in negotiation. By June 2025: negotiations between Wolfspeed management and the senior secured noteholder group (with Apollo positioned to take effective control through equity conversion) produced the executed RSA, with Renesas (a key customer and prepetition unsecured creditor) agreeing to convert its outstanding loan into a combination of equity and secured convertible debt. Renesas Electronics expected to record a loss of approximately $1.7 billion related to its Wolfspeed exposure and the deposit conversion. June 30, 2025: Wolfspeed filed for Chapter 11 with 97% of senior secured noteholder support, 67% of convertible noteholder support, plus Renesas U.S. subsidiary support. September 29, 2025: Wolfspeed emerged after a 91-day case, eliminating $4.6 billion of debt (70% of total) and cutting interest expense roughly 60%. CFIUS clearance for the Renesas equity issuance came in late January 2026, illustrating that emergence does not always conclude every regulatory approval workstream.

Concurrent with the RSA negotiation, the debtor's RX bank runs a DIP shopping process to source the post-petition financing that will fund the case. DIP financing is the lifeblood of Chapter 11: without it, the company cannot pay employees, vendors, or professionals, and the case typically converts to Chapter 7 liquidation. The DIP shopping process is designed to produce a competitive offer that the bankruptcy court will approve at the first-day hearing.

The DIP universe divides into two categories. Existing lenders (the prepetition first-lien lenders or, less commonly, second-lien lenders) often want to provide the DIP because doing so preserves their structural priority and lets them roll their prepetition debt into the post-petition facility. Third-party DIP funds (Apollo, Oaktree, Centerbridge, Bain Capital Special Situations, Sixth Street, Silver Point, Ares, Citadel, KKR Credit) compete to provide DIP financing as a way of taking control of distressed credit. The competitive tension between existing lenders and third-party funds is the dynamic the RX bank exploits to maximize the debtor's negotiating leverage.

The DIP shopping process runs in parallel with the RSA negotiation:

1. Weeks 1-4: RX bank distributes an information package to a curated list of potential DIP lenders under NDAs 2. Weeks 4-6: evaluates initial bids on pricing, structure, and conditionality and advances 2-4 finalists 3. Weeks 6-12: runs detailed term-sheet negotiation and documentation drafting 4. Weeks 10-14: secures a binding commitment letter from the lead bidder 5. Day 1: files the commitment with the petition for first-day approval

The First Brands case illustrates the modern DIP shopping process at scale. The company filed in SDTX on September 28, 2025 with a $1.1 billion DIP commitment from an ad hoc group of pre-petition lenders. The interim DIP order released funding on October 1, 2025; the final order released the full $1.1 billion at the second-day hearing on November 6-7, 2025. The DIP terms included strict milestones requiring the debtor to deliver a business plan by January 31, 2026, an RSA by March 28, 2026, and a sale-process launch by March 28, 2026, illustrating how DIP milestones effectively control the case timeline. Other 2024-2025 examples include Enviva's prepetition first-lien lender DIP (March 2024), CURO's $70 million new-money DIP (March 2024), and Azul's complex priming DIP (filed May 28, 2025; final order July 28, 2025).

The RSA negotiation and DIP shopping require the RX bank to conduct sustained wall-crossing outreach: holders sign NDAs to receive MNPI in exchange for trading restrictions, then receive a "wall-cross deck" with financial projections, debt covenant analysis, proposed plan terms, DIP structure, and recovery analysis. The largest 5-15 holders in each class are typically identified through 13F/13D filings and CUSIP-tracking services. Holders that decline either stay on the public side or wait for "cleansing materials" that let them rejoin the trading universe.

The Enviva ad hoc group (~95% of 2026 senior notes; March 2024) is a canonical recent example of well-organized prepetition bondholder coalition. The CURO ad hoc group (Oaktree, Caspian Capital, Empyrean Capital Partners; March 2024) illustrates how distressed credit funds organize as the prepetition advisor coalition that carries through into the case. The Wolfspeed RSA (97% of senior secured notes plus 67% of convertibles; June 2025) shows how outreach can secure near-unanimous support across multiple classes when the underlying economics work for everyone.

The pre-filing phase produces a comprehensive documentation package that is filed with the petition. The major documents fall into three categories: petition and supporting schedules, the first-day motion package, and substantive deal documents (RSA, DIP credit agreement, plan, disclosure statement). The drafting work happens in parallel across several teams.

Petition and schedules

Form 201 (the voluntary petition) is short and procedural, but the supporting schedules are extensive: schedules of assets and liabilities (Schedules A through H), statement of financial affairs, list of equity security holders, list of largest 30 unsecured creditors, list of insiders, and various other administrative documents. The work is detail-intensive and typically falls to the company's CFO and the bankruptcy counsel's restructuring team.

First-day motion package

Typically 15-25 motions covering wages, benefits, cash management, utilities, critical vendors, customer programs, insurance, taxes, professional retention, joint administration, and DIP financing. Each motion is supported by a declaration from a senior officer (often the CRO) explaining why the relief is necessary and what relief would be requested. The motion package can run 1,500-3,000 pages including exhibits.

Substantive deal documents

The RSA, the proposed DIP credit agreement, the proposed plan of reorganization, and the disclosure statement (filed shortly after the petition or at filing in the case of a prepack). These documents capture the substantive deal terms and form the legal basis for the eventual confirmation order.

A defining feature of modern restructuring engagements is the dual-track approach in which the company simultaneously prepares for an out-of-court restructuring (LMT, DEO, debt-for-equity swap) and an in-court Chapter 11 backstop. The dual-track strategy lets the company pursue whichever path produces better economics, with the threat of the Chapter 11 backstop sharpening creditor incentives in the out-of-court negotiations.

The dual-track work typically runs through the same advisor team. The RX bank that is shopping the DIP also evaluates LMT structures; the counsel team drafting the petition is also drafting any out-of-court exchange offer documentation; the FA building the projections supports both the out-of-court recovery analysis and the Chapter 11 plan. The cost of dual-tracking is real (advisor fees roughly double the single-track cost), but the strategic value is large: the threat of the Chapter 11 backstop produces materially better outcomes in many out-of-court engagements, and the embedded Chapter 11 readiness lets the company pivot quickly if the out-of-court path fails.

Mallinckrodt second filing as recent example

The Mallinckrodt second filing in August 2023 is a recent example. The company had originally restructured out of bankruptcy in 2020 (its first Chapter 11), and the second filing in 2023 came after a sustained period of dual-track engagement during which the company explored further out-of-court alternatives before pivoting to a prepackaged Chapter 11. The resulting prepack was confirmed in 43 days (and emerged within 78 days), eliminated all second-lien debt, reduced first-lien from $2.86 billion to $1.65 billion, and reduced total funded debt by $1.9 billion with broad creditor support.

The pre-filing phase is where modern restructuring practice concentrates its strategic work. The deliverables produced during this phase (RSA, DIP, first-day motions, ad hoc coalitions) determine almost everything about how the eventual Chapter 11 case unfolds. Restructuring bankers spend the majority of their pre-petition time on RSA negotiation and DIP shopping, with each major deal anchored on the relationship-building and term-negotiation work that characterizes high-quality pre-filing preparation.