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What does happen is that new jobs are created, almost always with higher grade classifications, which of course means higher salaries for the reorganizers.
168) The reorganizers, the report alleged, enriched themselves at the expense of the mass of claimants in the firms they were entrusted to set right.
Similarly, recapitalization under distress which replace debt with equity are consistent with the signalling hypothesis: The reorganizers hold revised expectations and signal a lower level of cash flow by proposing reduced debt services.