Explain StaRUG and when you would recommend it over InsO.
A core Restructuring interview question — asked in analyst and associate interviews across IB, PE, and the Big 4.
THE SHORT ANSWER
StaRUG is a pre-insolvency restructuring tool (since 2021) for companies facing impending but not yet actual insolvency. Key advantages over InsO: confidentiality (no public disclosure), management stays in control, cram-down mechanism to override holdout creditors. Recommend StaRUG when: (a) company is not yet insolvent, (b) only 1–2 dissenting creditors, (c) confidentiality matters (e.g., customer/supplier relationships), (d) management is competent and trusted.
WHAT INTERVIEWERS LISTEN FOR
- ✓Pre-insolvency restructuring tool
- ✓Confidentiality vs public InsO
- ✓Management stays in control
- ✓Cram-down mechanism
- ✓Not yet insolvent condition
COMMON MISTAKES
- ✗Confusing StaRUG with InsO
- ✗Recommending for insolvent companies
- ✗Ignoring cram-down requirements
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