Introduction
Restructuring interviews follow the same broad superday structure as other investment banking interviews but with distinctive content emphasis. The technical bar runs higher than typical M&A interviews because Rx work involves specialized analytical frameworks (capital structure analysis, recovery waterfalls, fulcrum security identification, valuation under distress) that candidates must demonstrate fluency with rather than just basic IB technicals. Behavioral questions track the standard IB themes but with added emphasis on "why restructuring" specifically and articulated interest in distressed credit dynamics.
This article walks through:
- the typical Rx interview format
- the technical and behavioral question mix
- the case study component
- how Rx interviews differ from M&A interviews
Superday Format
A Rx superday typically runs 5-6 hours with 5-6 back-to-back interviews of 30-60 minutes each. The interview team usually includes a mix of analysts, associates, vice presidents, and at least one MD or senior partner.
| Interview | Typical Format | Focus |
|---|---|---|
| 1 | 30-45 min with analyst/associate | Technical screen, basic capital structure |
| 2 | 45-60 min with VP | Deeper technicals, deal experience |
| 3 | 30-45 min with associate | Case study walkthrough or modeling test |
| 4 | 30-45 min with MD | Behavioral, motivation, fit |
| 5 | 30-45 min with VP | Cross-checking technicals, market questions |
| 6 | 45-60 min with senior MD | Final fit, deeper behavioral |
The technical bar rises through the day. Junior bankers (analysts and associates) typically ask the harder technical questions; senior bankers (MDs and partners) typically focus on behavioral, fit, and motivation. The pattern is intentional: junior bankers test whether the candidate can handle the analytical work; senior bankers assess whether they want to work with the candidate over years.
Technical Question Mix
Rx technical questions cover four broad categories with distinct emphasis from M&A interviews:
- Core IB fundamentals (~30% of technical questions). Standard valuation methods (DCF, comparable companies, precedent transactions, LBO), accounting fundamentals, and basic finance concepts. Rx interviewers test these to confirm the candidate has IB-grade fundamentals before drilling into Rx-specific topics.
- Capital structure and credit (~30%). Layers of debt (revolver, term loans, second lien, senior unsecured, subordinated, mezzanine), security and collateral, intercreditor dynamics, covenants, and credit metrics (Debt/EBITDA, fixed charge coverage, leverage ratios under different scenarios). Rx interviewers expect deeper fluency here than M&A interviewers.
- Restructuring-specific topics (~25%). Recovery waterfalls, fulcrum security identification, DIP financing structures, plan confirmation mechanics, Section 363 sales, credit bidding, absolute priority rule, cramdown, valuation under distress (going concern versus liquidation), and post-Purdue/post-Serta legal landscape.
- Current market awareness (~15%). Recent cases (First Brands, Rite Aid, Forever 21, Joann, Spirit Airlines), default rate forecasts (Fitch, Moody's, S&P), maturity wall ($1.2 trillion through 2027-2029), LMT trends and cooperation agreements, and major court rulings.
Behavioral Question Categories
Behavioral questions in Rx interviews test the same broad themes as in M&A interviews but with specific emphasis on Rx-relevant motivation:
- Why investment banking? Standard IB question; same answers work as in M&A interviews.
- Why restructuring specifically? This is the most-asked question in Rx interviews and the most differentiating. Strong answers articulate genuine interest in distressed dynamics, capital structure analysis, and creditor-versus-equity outcomes. Weak answers focus on prestige, compensation, or generic interest in IB.
- Why this firm? Firm-specific questions test whether the candidate has done research on the specific Rx franchise. Knowing the firm's marquee cases, senior partners, and tier positioning differentiates serious candidates.
- Walk me through your resume. Standard IB question; should highlight Rx-relevant experiences (case competitions, prior internships, coursework).
- Tell me about a time when... Standard behavioral STAR-format questions covering teamwork, leadership, conflict resolution, working under pressure, and similar themes.
- Tell me about a recent restructuring case. This is increasingly common in Rx interviews. A strong answer covers capital structure entering distress, trigger event, case strategy, and recovery profile.
The Case Study Component
Many Rx interviews (particularly at top boutiques) include a case study component that goes beyond verbal Q&A. Case studies typically take one of several forms:
- Capital structure walkthrough. Interviewer presents a hypothetical or real distressed company's capital structure. Candidate must identify the fulcrum security, walk through likely recoveries, and discuss strategic implications.
- Recovery waterfall modeling. Candidate must build or describe a recovery waterfall given an enterprise value, capital structure, and prioritization rules. Tests Section 506 bifurcation, absolute priority, and DIP super-priority understanding.
- Investment recommendation. Interviewer presents a current distressed name (often something tradeable in the market) and asks for an investment recommendation. Tests investment thinking and market awareness.
- Mini case studies on specific cases. Detailed walkthrough of a recent case (Rite Aid, First Brands, etc.) covering the capital structure, trigger event, DIP financing, sale process, and expected recovery profile.
The case study component is where Rx-specific preparation pays off most directly. Candidates who have studied real cases and can walk through them mechanically with confidence dramatically outperform candidates who rely on generic IB technical preparation.
How Rx Interviews Differ from M&A Interviews
Several specific differences distinguish Rx interviews from typical M&A interviews:
| Dimension | M&A Interview | Rx Interview |
|---|---|---|
| Technical depth | Broad fundamentals | Specialized + fundamentals |
| Capital structure questions | Some | Heavy emphasis |
| Modeling tests | LBO common | Recovery waterfall + LBO |
| Current market questions | Recent M&A deals | Recent Rx cases + LMTs + court rulings |
| "Why this group" depth | Moderate | High (specific tier knowledge expected) |
| Behavioral fit emphasis | Standard | Standard + "why distressed" |
| Case study component | Common | Very common, more technical |
The cumulative effect is that Rx interviews require 30-50% more preparation time than typical M&A interviews to reach the same level of confidence. Candidates underestimating this often perform well in M&A interviews but struggle in Rx interviews despite similar academic and professional backgrounds.
What Strong Performance Looks Like
A strong Rx interview performance typically includes:
- Confident handling of capital structure questions through three or four layers of complexity
- Ability to walk through a recovery waterfall verbally without paper or whiteboard
- Identification of the fulcrum security in any given capital structure
- Detailed knowledge of at least two recent Rx cases (capital structure, trigger, strategy, outcome)
- Articulate "why restructuring" answer with specific reasons rather than generic interest
- Awareness of major court rulings (Purdue, Serta, LTL) and their implications
- Knowledge of the firm's specific positioning, marquee cases, and senior partners
Preparation Timeline
Effective Rx interview preparation typically requires 6-10 weeks of focused study, allocated as follows:
- Weeks 1-2: Core IB fundamentals review
- Weeks 3-4: Rx-specific technical topics (this guide's Sections 5-7)
- Weeks 5-6: Current market cases and court rulings (this guide's Section 8)
- Weeks 7-8: Behavioral preparation and case study practice
- Weeks 9-10: Mock interviews and refinement
The next five articles in this section drill into the specific question categories and technical preparation that comprise the Rx technical bar.
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