Moody’s data on contested corporate debt swaps shows that parties caught in what lawyers call creditor‑on‑creditor violence recover barely any value. In the sample, losers claw back 14 cents on the dollar of their claims, a fraction that leaves them with negligible upside after costly litigation and restructuring fees. Such outcomes deter participation in future swaps.

Investors and distressed‑asset managers watch these recoveries closely because they shape pricing of high‑yield bonds and distressed‑sale premiums. When creditors anticipate sub‑par recoveries, they may demand higher yields or push for pre‑emptive settlements, compressing spreads and altering the supply of secondary‑market debt. The Moody’s study quantifies a risk premium that has been largely anecdotal until now.

Companies embroiled in such battles often emerge with weakened balance sheets, limiting future borrowing capacity and forcing asset divestitures. Creditors, meanwhile, reassess exposure limits and may seek tighter covenant protections in new issuances. The data underscores that aggressive debt restructurings rarely reward the losing side, reinforcing the need for disciplined negotiation before disputes turn violent. Stakeholders must account for this loss.