This chapter is the curriculum. Twelve weeks, roughly eight to ten hours each, sequenced so that every phase depends on the one before it. Each phase ends with something you build rather than something you have read, because in this field reading comprehension and modelling competence are different skills and only the second one is demonstrable.
Phase 1 — Vocabulary and the waterfall (weeks 1–2)
Work through the Wall Street Prep 11-part free restructuring series end to end and download the accompanying Excel file — roughly three to four hours. Then read their knowledge-base entries on the absolute priority rule, fulcrum security, DIP financing, cash collateral, critical vendor motions, first day motions, liquidation value, and Chapter 7 versus Chapter 11. Finish with Damodaran's distress slides and skim the underlying paper; the one idea that must stick is that a going-concern DCF systematically overstates distressed value.
Build: a one-page capital structure diagram for any levered company, by hand — every tranche, its size, its security, its guarantors, its maturity, mapped to the issuing entity. Pull it from the 10-K and the exhibit index. Do this on paper before you do it in a spreadsheet, because a spreadsheet will let you sum debt across entities that cannot reach each other's assets.
Checkpoint: you can explain without notes where the fulcrum security sits and why it is the one that matters.
Phase 2 — Credit analysis (weeks 3–4)
This is the phase most self-taught analysts skip, and skipping it is why they lose money. Work through the credit analysis framework in the order set out in Chapter 6 — business, industry, financials, structure. Gatto's book is the best single source if you buy one; his long-form interviews cover the framework at a lower resolution if you do not. Pull a Moody's or S&P annual default and recovery study and commit the rough recovery base rates by seniority to memory.
Build: a three-page credit memo on one company. Thesis, capital structure, liquidity runway, what breaks first, what you would own and at what price. Three pages is a constraint, not a suggestion.
Checkpoint: given a capital structure and an enterprise value, you can compute recoveries by tranche in your head to within a few points.
Phase 3 — Legal mechanics (weeks 5–6)
Read the Weil restructuring blog by category rather than chronologically — twenty or thirty posts each on DIP Financing, 363 Sales, Executory Contracts, and Cramdown. Listen to the ABI podcasts, which are free, and skip the abiLIVE webinars, which are not. Then read one full plan confirmation opinion from Delaware or the Southern District of Texas via CourtListener. It will be tedious; it teaches you what judges actually care about, which differs from what bankers say they care about.
Build: a one-page timeline of a real Chapter 11 from petition date to effective date, annotated with the actual docket numbers of each key motion and order.
Checkpoint: you can explain the cramdown test and why absolute priority has more exceptions in practice than in theory.
Phase 4 — The docket deep dive (weeks 7–9)
This is the core of the curriculum; everything before it was preparation. Pick one completed large Chapter 11 where you can see the whole arc — Bed Bath & Beyond, JOANN, Big Lots, and Franchise Group all have live Kroll dockets. Work the documents in order: the First Day Declaration for the debtor's own account of failure; the DIP or cash collateral motion and specifically its budget exhibit; the Disclosure Statement for the liquidation and recovery analyses; the UCC's objections for the adversarial view; and the confirmation opinion for how it resolved.
Build: rebuild the 13-week cash flow model from the DIP budget exhibit in a blank spreadsheet — reconstructed from the disclosed line items until your output ties to theirs, not copied. Then rebuild the liquidation analysis from the disclosure statement. These two artefacts are the closest thing to a portfolio this field has.
Checkpoint: you can explain where the money went, who got paid, who did not, and why — citing docket numbers.
Phase 5 — Liability management (weeks 10–12)
Save this for last. It is the most interesting part of the field and it is incomprehensible without the first four phases. Read the Serta Fifth Circuit decision itself rather than a summary, then Mitel, then three law firm alerts on the pair — Jones Day, Akin, and Cleary all published good ones — noting where they disagree, because the disagreements are the interesting part.
Then pull both credit agreements from EDGAR and read the pro rata sharing provisions and sacred rights side by side. This is the exercise that makes the whole area click: near-identical transactions, opposite outcomes, and the difference is a handful of words. Subscribe to Pari Passu and read new issues as they publish, focusing on the post-Serta structures. Track the roughly $400mm liability finding on remand and how the market responded.
Build: a memo comparing two LMEs — one that survived challenge and one that did not — arguing from the contract language rather than from the transaction shape.
Checkpoint: handed a credit agreement, you can find the holes — unrestricted subsidiary capacity, investment baskets, the pro rata sharing exception — and say what an aggressive sponsor would do with them.
What free sources cannot give you
The curriculum above will make you genuinely competent at reading a capital structure, a docket, and a credit agreement. Three things it will not give you. Real-time market data — where paper actually trades sits behind Octus, Debtwire, LevFin Insights, and Bloomberg, and there is no free substitute. Repetitions — distressed judgment comes from having seen many situations, and the only way to compress that is deal count. The room — much of what determines outcomes is negotiated among a small number of repeat players who know each other, and no public document captures it.
Work the dockets anyway. The number of people who can rebuild a 13-week model from a DIP exhibit is small enough that the skill is visible.