Hire a turnaround advisor when cash is running out faster than the plan says, lenders are asking questions, or a covenant breach is weeks away. Hire while there are months of cash left, not days.
Expect a 13-week cash flow forecast first, a view on whether the business can be saved, and a plan for talks with lenders. In a Chapter 11 case the court must approve the advisor's hiring and fees, and the hourly rates appear in court filings.
What they do
A turnaround or restructuring advisor stabilizes cash, decides with the board whether and how the business can be saved, and negotiates with the people owed money.
Stabilize. They build a week-by-week cash forecast, usually covering 13 weeks, and take control of payments. They find cash in working capital, cut costs, and stop spending that can wait.
Diagnose. They test whether the core business makes money once one-off problems are removed, and how much debt it can carry.
Negotiate. They prepare a business plan backed by evidence, then work with counsel and bankers on waivers, amendments, new money or a debt-for-equity swap.
Run the company, if asked. Some advisors serve as chief restructuring officer (CRO), an officer role with management authority.
In Chapter 11. The court approves each advisor's hiring. Under the Bankruptcy Code, professionals employed by the estate must be disinterested and hold no interest adverse to the estate. Fees can be hourly, fixed, a percentage, contingent or on retainer, and the court can review them.
When to hire, and when not to
Hire when
- The 13-week cash forecast shows a shortfall, or nobody has built one.
- A covenant breach or missed interest payment looks likely.
- Your lenders want an independent review of the business plan before they agree to anything.
- Suppliers are tightening terms, and management's time is going to managing cash day by day.
- The board is weighing a sale, a debt restructuring or a Chapter 11 filing and needs an independent view of the options.
Skip it when
- Profit is falling but cash and covenants are comfortable. Consider a strategy or operations review instead.
- The board has already decided to wind the business down and needs an orderly sale of assets. Consider an asset sale or liquidation specialist instead.
- You need only a refinancing and the lenders are supportive. Your banker and counsel may cover it.
- You want an advisor to tell lenders what they want to hear.
How engagements are set up
Independent business review
A fixed-scope review of the business plan, cash and options. Lenders may ask for one. Ask who chose the firm, who pays, and who the report is addressed to.
Company-side financial advisor
Builds the cash forecast and business plan, supports negotiations with lenders, and prepares for a filing if needed. Fees can be hourly, monthly, on completion, or a mix.
Chief restructuring officer or interim executive
An advisor takes a management role with authority over cash and operations. In Chapter 11, US Trustee practice lets the CRO's firm serve in only 1 capacity, such as CRO or financial advisor.
Creditor or committee advisor
Works for lenders or for the official committee of unsecured creditors. In Chapter 11, a committee hires its advisors with court approval, and the court awards their compensation.
Completion or success fee
A fee paid when a restructuring, refinancing or sale closes. Agree what counts as completion. In one August 2026 Chapter 11 order, the court barred the restructuring fee if the case converted, was dismissed for cause, or a trustee was appointed.
What it costs
Turnaround fees are hourly, a fixed monthly amount, a fee on completion, or a mix. One CRO retention approved in August 2026 combined a monthly fee, hourly fees and a restructuring fee. In Chapter 11, the Bankruptcy Code lets the court approve fees on a retainer, hourly, fixed, percentage or contingent basis.
The ranges below come from a June 2026 Chapter 11 filing that compared 14 financial advisor retentions from 2024 to 2026. Ask for a weekly fee report and a cap for each phase.
| Scope | Range | Note |
|---|---|---|
| Highest hourly rate in each of 14 Chapter 11 financial advisor retentions, 2024 to 2026 | $1,160 to $1,620 per hour | Rate-comparison exhibit filed June 2026 in a Chapter 11 case in the Western District of Pennsylvania. Covers advisors to debtors and to creditors' committees. |
| Managing directors and partners at one creditors' committee financial advisor, after a 10% discount | $810 to $1,440 per hour | Same filing. Junior staff at the same advisor billed $333 to $675 per hour. |
Before you talk to firms
- Cash balances, committed facilities and every payment due in the next 13 weeks.
- Loan agreements, covenant calculations and any notices from lenders.
- The latest monthly accounts, the budget, and the most recent forecast you gave lenders.
- A list of critical suppliers, their terms and any recent changes.
- A board ready to meet weekly and decide fast, and counsel experienced in restructuring.
Questions to ask in the pitch meeting
- How many restructurings have you worked on in our industry and size range in the last 3 years, and which went out of court and which into Chapter 11?
- Who will be on site day to day, and what are their hourly rates?
- How soon will we have a 13-week cash flow forecast, and who will own it after you leave?
- Have you or your firm worked for any of our lenders, major creditors or likely buyers? What are the conflicts?
- If we file, will you seek to be retained by the court, and in which role?
- What completion or success fee do you propose, and when is it payable?
- What would make you advise the board that the business cannot be saved?
- Which lenders have you negotiated with recently, and how did those talks end?
- What would you have us do in the first 2 weeks?
Warning signs
- They propose a CRO role and a financial advisor role for the same firm in the same case.
- They work regularly for your main lender and do not disclose it.
- The completion fee is payable even if the case ends in conversion, dismissal or a trustee.
- Two weeks in, there is still no cash forecast.
- They promise an outcome with lenders before they have seen the numbers.
- Staffing grows every month, with no weekly fee report.
- They recommend a sale to a buyer they also advise.
Frequently asked questions
What is a 13-week cash flow forecast?
It is a week-by-week forecast of cash coming in and going out over the next quarter, rolled forward and updated as actuals arrive. It shows when cash runs short and which payments can move. Banks and lenders often require one from companies under financial stress before they extend, renew or change credit. Ask for it in the first days of the engagement.
Who hires and pays advisors in Chapter 11?
The debtor hires its professionals with court approval, and they must be disinterested. The official committee of unsecured creditors can also hire attorneys, accountants or other agents with court approval. The court then awards reasonable compensation, looking at time spent, rates charged, and what comparably skilled practitioners charge outside bankruptcy. Budget for both sides' advisors.
What is a chief restructuring officer?
A CRO is an executive, usually supplied by an advisory firm, who runs the restructuring with management authority. By 2018, the US Trustee Program said courts had approved hundreds of CRO retentions under its CRO protocol. It bars a CRO who served on the debtor's board within 2 years, and lets the firm serve in only 1 role. A Houston bankruptcy court approved a CRO retention under it in August 2026.
How much do restructuring advisors charge in Chapter 11?
Rates are public because the court approves them. A rate comparison filed in a Chapter 11 case in June 2026 listed 14 financial advisor retentions from 2024 to 2026. The highest hourly rate in each ranged from $1,160 to $1,620. Total cost depends on staffing and weeks. Ask for a weekly fee report and a budget by phase.
Does the US Trustee review financial advisor fees?
Yes. The US Trustee Program reviews fee applications under its guidelines. Its 2013 Appendix B guidelines cover attorneys in larger Chapter 11 cases. Its 1996 guidelines still cover non-attorney professionals, such as financial advisors, in those cases. The court can also allow different compensation if agreed terms prove improvident.
Sources
- Joint motion and rate-comparison exhibit on financial advisor hourly rates, Chapter 11 Case No. 26-20515, W.D. Pa. (June 2026)
- Order authorizing retention of a chief restructuring officer under the US Trustee's CRO protocol, Chapter 11 Case No. 26-90714, S.D. Tex. (August 2026)
- Article on the purpose and strategic value of a 13-week cash flow forecast (September 2025)
- US Trustee Program, The Future of the USTP's CRO Protocol (2018, archived)
- US Trustee Program, Fee Guidelines
- 11 U.S. Code § 327, Employment of professional persons
- 11 U.S. Code § 328, Limitation on compensation of professional persons
- 11 U.S. Code § 330, Compensation of officers
- 11 U.S. Code § 1103, Powers and duties of committees
Written by Stratrix editors from public sources and checked claim by claim by a second AI model. Firms pay Stratrix when they accept an introduction; they do not pay to influence this guide, and it names none of them. How introductions work