Chapter 11
Chapter 11 is US reorganization bankruptcy — the firm tries to stay a going concern while claims are rewritten.
Definition
Chapter 11 refers to the firm tries to stay a going concern while claims are rewritten. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
Spreads and default paths reprice risk appetite faster than many equity narratives admit. When the firm tries to stay a going concern while claims are rewritten shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what chapter 11 is saying. If the firm tries to stay a going concern while claims are rewritten moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
Separate idiosyncratic names from index beta; watch issuance windows and rating migration. Prefer a short written null hypothesis for Chapter 11: what would falsify the current reading in the next window?