36 Restructuring Interview Questions With Sample Answers
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Interviewers may ask various questions to determine if you're an ideal candidate for a restructuring position. It's also an opportunity for you to display your knowledge, skills and experience to convince the hiring manager you're a suitable candidate. Learning what restructuring is and the questions interviewers are likely to ask can help you prepare and improve your chances of succeeding in the interview. In this article, we explain the different types of interview questions and discuss 36 restructuring interview questions with a few sample answers.
General restructuring interview questions
An interviewer may ask general restructuring questions to determine your personality, background and working style. They also help the employers to determine if you may be a good fit for the company's culture. Here are 10 examples of general questions interviewers may ask in a restructuring finance interview:
What are your hobbies?
Where do you see yourself in five to 10 years?
What are your strengths, and how do they relate to this position?
What are your weaknesses? What steps are you taking to improve them?
What do you know about our company?
How did you learn about this job opening?
Tell me about yourself.
How do you feel about working late hours or on weekends?
Why did you decide to leave your previous job?
Do you have any medical conditions?
Interview questions about experience and background
Interviewers may ask these questions to understand your qualifications, experience and background. The hiring managers may derive some questions from your resume as they try to learn more about your experience. Here are 10 questions to help you prepare for restructuring interview questions about experience and background:
Do you have any experience with mergers and acquisitions?
What do you consider the most significant achievement in your career?
Do you have any leadership experience?
What did you like most and least about your last job?
How have your skills developed since your first job?
Have you ever made a tough decision at work?
What certifications and training do you have that may apply to this role?
Have you ever made a mistake at work?
Why did you choose a career in this field?
How do you manage stressful situations?
In-depth interview questions
Interviewers may ask the question to get more details about your knowledge and experience and to understand how they relate to the job's responsibilities. Here are 10 in-depth questions hiring managers may ask at a restructuring job interview:
What steps do you take to conduct a detailed financial analysis?
Have you ever cautioned against a deal because it may be a mistake? How did you approach it?
Can you describe some signs of a company with good financial health?
Why would a company become distressed and require restructuring?
What types of bankruptcy can a company experience?
Can you mention some out-of-court restructuring solutions?
What's a par-to-par exchange?
What liquidity management solutions can you implement to help a company avoid distress and bankruptcy?
When does a bank's debt leave the capital structure?
6 restructuring interview questions with sample answers
Here are six examples of restructuring interview questions with sample answers to help you prepare:
1. Who does a company owe a fiduciary responsibility after declaring bankruptcy?
Interviewers may ask this question to see if you understand fiduciary responsibility. Fiduciary responsibility is an obligation to pay creditors and shareholders. When a corporation is bankrupt, it has a nil capital price. The company has a fiduciary duty to its shareholders. In your answer, show that you understand what fiduciary responsibility is and how it works.
Example: 'Fiduciary responsibility is an obligation to act on behalf of an individual or organisation and pursue their best interest. A company's executives have a fiduciary responsibility to its shareholders. If the company undergoes financial distress, the executive still maintains their responsibility to shareholders. If a company goes bankrupt, its value goes to zero. In bankruptcy, the company's executives also have a fiduciary responsibility to the company's creditors.'
2. How does financial distress manifest in a company's finances?
Employers may ask this question to assess your ability to monitor a company's financial health. Part of your restructuring responsibilities includes understanding if a company is in distress and identifying factors that may cause the distress. Your answer may highlight signs of financial distress in a company, such as no liquidity, failure to satisfy a role function or inability to service their debts.
Example: 'Companies may have unique indications of financial distress. Many companies may struggle with financial distress because of liquidity issues. It may be a sign of negative cash flow and the situation may worsen to a point where the company can't meet various functions or satisfy payroll. Another sign of financial distress in a company is failure to afford to pay debts.'
3. What action may you take if a potential client with a considerable amount of debt cannot select your bank?
Employers ask this question to assess if you understand other options to pursue if a company cannot select your investment back for restructuring. In your answer, mention that the main option can be creditors after a potential client fails to select your bank. You may also emphasise that it's better for a debtor to choose the company to lead the restructuring.
Example: 'There's still an option if the company doesn't choose us to restructure or lead a potential sale. The better choice is to pitch to them so that they can choose us to develop solutions for distress situations or lead a potential sale. If we cannot get the debtors, we may pursue the creditors who may have an interest in the sale or solutions for distress.'
4. What's a POR?
Employers may ask you to define POR, so they can assess your knowledge of the industry. POR is an abbreviation for the plan of reorganisation. In your answer, define (POR) and describe what it includes.
Example: 'A plan of reorganisation is a document that contains details about a turnaround plan after negotiating with creditors. The document mainly features financial details, such as the reasons why the company has become bankrupt, the existing capital structure and creditors. It shows how the company intends to maintain its operations while paying off the credit. Companies may choose to liquidate their assets and the POR includes the plan for liquidation and potential payouts to the creditors.'
5. Why do you want to work as a restructuring manager for this company?
Interviewers may ask this question to determine your motivation, qualifications and goals for pursuing your career with the company. You may mention that you feel that your career objectives align with the company's goals. It provides an opportunity to let the interviewer know why you're an ideal candidate for the position.
Example: 'I believe that your company provides adequate opportunities to grow and improve my restructuring knowledge and skills. Your company is a popular brand in financial consultation and I wish to be part of a team with a reputable work ethic and good customer relations. My skills, experience and education make me an ideal candidate for the position.'
6. What happens to a company's equity if the value of its debts is higher than the value of its assets?
Employers may ask this question to assess how well you understand the concept of equity. It's common for a company to have a higher value of debts than assets. In your answer, explain that the equity value may become negative, but the equity market cap remains positive.
Example: 'When the value of debts is higher than the value of assets of a company, the equity becomes negative. It may happen if a company is unprofitable or in a leveraged buyout. A leveraged buyout is when a company borrows a large amount of money to finance the acquisition of another company. The equity market capitalisation, which is the value of all the shares the company trades in the equity market, remains positive. You can get it by multiplying outstanding shares by the share price.'
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