Restructuring Support Agreement (RSA)
A Restructuring Support Agreement, or RSA, is a contract among a financially distressed company and supporting creditors or other stakeholders that sets the agreed framework for a restructuring and requires the parties to support specified transactions, subject to the agreement's conditions and termination rights.
An RSA converts a negotiated term sheet into binding support obligations
Restructuring negotiations can produce a commercial deal without guaranteeing that stakeholders will continue supporting it.
The RSA reduces that execution risk by requiring signatories to support the agreed restructuring while the company completes documentation, financing, solicitation and court steps.
The restructuring term sheet carries much of the economics
The attached term sheet typically describes which debt is reinstated, exchanged, converted to equity or impaired; how new money is raised; and how reorganized ownership is allocated.
The RSA then supplies the behavioral rules: support, voting, transfers, milestones, cooperation and termination.
Signing an RSA is not the same as confirming a Chapter 11 plan
Current 2026 RSAs expressly state that they are not offers of securities or solicitations of acceptances of a Chapter 11 plan.
A bankruptcy plan still must satisfy the Bankruptcy Code's disclosure, voting and confirmation requirements before it becomes binding through confirmation.
Milestones create execution discipline
An RSA can require filing by a deadline, entry of DIP orders, disclosure-statement approval, confirmation and emergence by specified dates.
Missing a milestone can give supporting creditors a termination right unless the deadline is extended or waived under the agreement.
Support percentage should be analyzed by class, not only in aggregate
Assume an RSA is signed by creditors holding 80% of total funded debt. That sounds overwhelming, but the capital structure contains three separate voting classes:
- first-lien lenders: 95% support
- second-lien lenders: 70% support
- unsecured notes: 35% support.
The aggregate 80% figure can hide a weak class.
If the restructuring is implemented through Chapter 11, class voting and confirmation rules still matter. A company can have strong overall creditor support while facing a rejecting impaired class that must be addressed through negotiation or, if available, cramdown.
For this reason, the useful RSA dashboard tracks support by claim class, required voting threshold, termination threshold and treatment under the proposed plan rather than reporting one headline percentage.
Common mistakes
Assuming every RSA guarantees the restructuring will close Court approval, financing and other conditions can still fail.
Treating supporting creditors as one homogeneous class Different debt classes can receive different recoveries.
Ignoring termination rights A strong support percentage can disappear if the RSA terminates.
Example
A company with $3 billion of funded debt signs an RSA with lenders holding 85% of the affected claims. The creditors agree to support a Chapter 11 plan that exchanges debt for new equity and takeback debt, while the company agrees to file by a specified date and meet financing, disclosure and confirmation milestones.
Example
A company with $3 billion of funded debt signs an RSA with lenders holding 85% of the affected claims. The creditors agree to support a Chapter 11 plan that exchanges debt for new equity and takeback debt, while the company agrees to file by a specified date and meet financing, disclosure and confirmation milestones.
Professional note
The support percentage is only one measure of RSA strength. Review which creditor classes signed, termination rights, fiduciary-outs, milestones, transfer restrictions, consent thresholds and whether the agreement obligates signatories to vote for a later plan.
Related terms
- Debt Exchange Offer
A debt exchange offer is an offer by an issuer or borrower to holders of existing debt to surrender that debt in exchange for newly issued debt or other securities under stated terms and conditions.
- Liability Management Transaction (LMT)
A Liability Management Transaction, or LMT, is a financing or restructuring transaction used to alter a company's debt obligations, liquidity, maturity profile, collateral or creditor priority, often outside a formal bankruptcy process.
- Cooperation Agreement
A lender Cooperation Agreement is an agreement among creditors to coordinate specified actions, information sharing and negotiations, often to reduce the risk that a borrower or sponsor divides the lender group through a selective liability-management transaction.
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