In Getting to Yes: The Role of Coercion in Debt Renegotiations, Professors Vincent Buccola and Marcel Kahan offer a deep and clarifying intervention in a murky but critical corner of modern corporate finance. Despite the surge in controversial out-of-court restructurings—where debtors use increasingly aggressive tactics to sidestep unanimity and rewrite deal terms—the legal framework for evaluating such moves remains surprisingly underdeveloped. Judges tend to treat these fights as disputes among sophisticated players and very rarely imply covenants or override textual language. Buccola and Kahan step into this vacuum with an elegant conceptual framework for understanding coercion in debt alteration and, crucially, when courts should push back.
This is an important piece, both for its ambition and its pragmatism. Its core insight is that many renegotiation techniques may induce “consent” from creditors while leaving them collectively worse off. Buccola and Kahan offer a systematic account for understanding how this happens, identifying four key structural features—ranking, conditionality, exclusivity, and voting variability—that shape the coerciveness of any consent solicitation. They then show how these features combine in real-world practices such as exchange offers, exit consents, dual conditionalities, ballot stuffing, and exclusive uptiers, many of which have gained prominence in recent years. Some of these strategies resemble classic coordination problems or even prisoner’s dilemmas, in which individual creditors are pressured to accept a deal that, in aggregate, harms the group. By rigorously mapping the mechanics and incentives at play, the authors create a typology of coercive tactics that can push transactions over the finish line even when they diminish overall creditor value. This roadmap will be essential not only for academics but for practitioners and judges navigating these increasingly frequent and complex contests.
What makes their paper timely is the growing dissonance between market practice and the absence of a theoretical or doctrinal compass. As the authors note, litigation over debt restructuring mechanics has proliferated—but often without a common vocabulary or framework for assessing what’s at stake. The problem isn’t just doctrinal uncertainty—it’s that we lack a broader legal theory for how to think about coercive debt renegotiation. Courts often resolve these disputes ad hoc, without clearly articulating what makes a transaction problematic beyond vague intuitions about fairness or overreach. Buccola and Kahan premiere a shared grammar.
They also strike the right tone. Their paper resists taking sides. Instead, it adopts a measured middle ground: everyone at the table—private equity sponsors, institutional investors, their lawyers—understands the trade-offs between stronger contractual protection and pricing. The contracts may be incomplete, but the parties are not naïve. Thus, the question isn’t how to rescue unsophisticated investors but how to design rules that deter destructive rent-seeking on either side, while still allowing for value-enhancing adjustments when circumstances change.
This last point is among the paper’s most poignant contributions: the authors wrestle directly with the tension between market failure and surplus maximization. Coercion isn’t always bad; sometimes it’s the price of overcoming holdout problems and unlocking value. But some tactics—particularly those involving exclusivity, like uptier exchanges or selective inducements—seem more like grabs than governance. The trick, as always, lies in distinguishing between the two.
The authors’ proposed interpretive presumption—essentially a version of contra proferentem for coercive solicitation methods—offers a workable doctrinal nudge. Where contracts are silent or ambiguous, courts should lean against coercion. But Buccola and Kahan stop short of endorsing sweeping bans or mandatory terms. They recognize the complexity of the terrain, the variability of contracting practices across markets, and the risk of choking off innovation with overly rigid rules.
Still, the institutional realities loom large. As the authors acknowledge, these decisions are made by judges who are likely to be more sympathetic to debtors—especially when the alternative is a value-destructive bankruptcy that risks layoffs and other spillover costs. Institutional investors, by contrast, may be perceived as sophisticated repeat players who had every opportunity to protect themselves. That background bias, however defensible, means courts may hesitate to police coercion even when the legal or economic case for intervention is strong.
This raises a broader policy question, only implicit in the paper but hard to ignore: Are we witnessing a quiet blurring of the boundary between bankruptcy and contract law? Buccola and Kahan describe a landscape where private restructuring techniques—uptiers, ballot stuffing, exclusive exchange offers—achieve results that resemble bankruptcy outcomes but without judicial oversight, creditor committees, or statutory protections. In effect, these are reorganizations through contract rather than court. That drift invites debate about whether debt workouts should remain primarily a matter of private contracting, or whether some of these practices warrant a policy response. While the authors refrain from normative pronouncements, their description lays the foundation for precisely that debate.
So where should the conversation go next? First, as the authors themselves hint, we need more empirical work tracking the actual impact of different solicitation structures on bond pricing, default outcomes, and cost of capital. What market signals exist to distinguish coercion that is merely aggressive bargaining from coercion that is genuinely value-destroying? Second, more normative clarity is needed about the role of courts. Should judges aim to maximize aggregate creditor value? Police consent quality? Preserve contracting incentives? Buccola and Kahan point us in these directions without prescribing a single theory.
Finally, the bigger institutional question deserves sustained attention: If out-of-court restructurings now do much of what Chapter 11 once did, should we rethink the legal boundaries between bankruptcy and debt contracting? Buccola and Kahan don’t push that far, but they’ve shown us how to start thinking seriously about it.
And for that, this piece will be indispensable reading for anyone who thinks seriously about debt, contracts, and the institutions that hold them together—or let them be unwound.
