Real life examples of distressed firm
One firm that was in distress is General Motors (GM). The American automotive company faced severe financial distress during the 2008-2009 global financial crisis. Sales declined, debt increased, and competition in the sector grew as consumer become more and more price sensitive. As a result, GM filed for Chapter 11 bankruptcy protection on June 1, 2009. Then with the help of the US government they received bailout funds and the company saw a successful restructuring process, which saved the business (but in the process thousands of employees lost their jobs).