Author: Taylor Warfield, Former Bain Manager and interviewer

Last Updated: March 29, 2026

 

Restructuring case interviews test whether you can save a business that is running out of time and money. Unlike a standard profitability case, the wrong sequence of actions in a restructuring case can accelerate a company’s decline instead of fixing it.

 

These cases appear in roughly 10 to 15% of consulting interviews at McKinsey, BCG, and Bain. They show up even more frequently at turnaround-focused firms like AlixPartners, FTI Consulting, and Alvarez & Marsal. In my experience coaching hundreds of candidates at Bain, restructuring cases trip up even strong performers because they require a fundamentally different mindset than growth or profitability cases.

 

But first, a quick heads up:

 

McKinsey, BCG, Bain, and other top firms accept less than 1% of applicants every year. If you want to triple your chances of landing interviews and 8x your chances of passing them, watch my free 40-minute training.

 

What Is a Restructuring Case Interview?

 

A restructuring case interview presents you with a distressed company facing declining revenue, negative cash flow, or an unsustainable debt load. Your job is to design a sequenced turnaround plan that balances short-term survival with long-term recovery.

 

The defining feature of a restructuring case is urgency. In a profitability case, the company will survive while you work on improving margins. In a restructuring case, the company may have only months of cash left before it cannot pay its employees, suppliers, or creditors. According to a study from the Turnaround Management Association, roughly 60% of companies that enter formal restructuring processes fail to survive as independent entities. That pressure changes everything about how you prioritize your actions.

 

Restructuring cases can involve several types of change. The most common types you will see in consulting interviews are:

 

• Operational restructuring: Fixing the business itself by cutting costs, closing unprofitable locations, rationalizing product lines, or improving supply chain efficiency

 

• Financial restructuring: Fixing the balance sheet through debt renegotiation, debt-for-equity swaps, asset sales, or refinancing

 

• Organizational restructuring: Redesigning the company’s structure, reporting lines, or workforce to improve efficiency and reduce overhead

 

• Strategic restructuring: Fundamentally changing the company’s business model, target market, or competitive positioning

 

Most consulting restructuring cases focus on operational and financial restructuring. Investment banking restructuring interviews, by contrast, go deep on capital structure and bankruptcy law. This article focuses specifically on consulting case interviews, which test business judgment and structured problem solving rather than technical finance knowledge. For a broader look at case types, see our guide to the 14 types of consulting cases.

 

What Framework Should You Use for a Restructuring Case?

 

The best framework for a restructuring case follows four phases: Diagnose, Stabilize, Restructure, and Reposition. The order matters. You must stabilize the business before restructuring it, and restructure before repositioning for growth. Skipping ahead is the most common mistake candidates make.

 

This framework reflects how real turnaround consultants approach distressed companies. According to McKinsey’s practice materials on transformation, roughly 70% of turnaround programs fail because management tries to pursue growth initiatives before addressing the fundamental cost and cash flow problems. In a case interview, demonstrating that you understand this sequencing will immediately set you apart.

 

For a deeper look at how to build custom frameworks for any case type, check out our case interview frameworks guide.

 

How Do You Diagnose the Root Cause of Decline?

 

Before proposing any fix, you need to understand what is broken and how fast the situation is deteriorating. Diagnosis should take the first 5 to 8 minutes of your case. Ask questions across three dimensions:

 

• Financial health: What is the revenue trend over the last 3 to 5 years? What is the company’s cash position and monthly burn rate? What is the debt load and when are the next maturities? What is the interest coverage ratio?

 

• Operational efficiency: What is the fixed versus variable cost ratio compared to industry benchmarks? What is capacity utilization across locations or product lines? Which business units are contributing margin and which are cash drains?

 

• External context: Is the decline company-specific or affecting the entire industry? Are there regulatory changes, technology disruptions, or macroeconomic factors driving the decline? What are competitors doing differently?

 

One critical distinction during diagnosis is whether the decline is cyclical or structural. Cyclical decline, such as a drop in demand during a recession, requires cost flexing and financial bridges until conditions improve. Structural decline, such as a retailer losing market share to e-commerce, requires a fundamental business model change. According to BCG’s research on corporate turnarounds, companies that correctly diagnose structural decline and pivot early have a 2.5x higher survival rate than those that treat it as cyclical.

 

How Do You Stabilize a Distressed Business?

 

Stabilization buys time. The goal is to stop the cash bleed within 90 days so that the company survives long enough for deeper restructuring to take effect. Think of it as a 13-week cash flow exercise.

 

The single most important number in any restructuring case is cash runway: cash on hand divided by monthly burn rate. A company with 18 months of runway needs a fundamentally different plan than one with 4 months. Always ask about cash position before anything else.

 

Here are the most common stabilization levers, organized by speed of impact:

 

Stabilization Lever	Typical Cash Impact	Speed
Discretionary spending freeze	5 to 8% of SG&A	Immediate
Capex freeze (non-essential)	100% of discretionary capex	Immediate
Receivables acceleration	10 to 20% of overdue AR	2 to 4 weeks
Supplier payment term extension	15 to 30 extra days of payables	2 to 6 weeks
Headcount reduction (non-revenue)	10 to 15% of SG&A	4 to 8 weeks
Close unprofitable locations	Varies by lease structure	4 to 12 weeks

 

In a case interview, you don’t need to list every lever. Pick the 3 to 4 most impactful ones for the specific scenario and explain why you chose them. The interviewer is testing your judgment and sequencing, not your ability to memorize a long list.

 

How Do You Restructure Operations vs. Finances?

 

Once cash flow is stabilized, you move to structural fixes that take 3 to 12 months. Most turnarounds require both operational and financial restructuring. In a case interview, always address operational restructuring first. Fixing a broken cost structure demonstrates stronger business judgment than jumping straight to debt renegotiation.

 

Operational restructuring fixes the business itself. Common levers include supply chain consolidation, SKU rationalization (cutting the bottom 20% of products by margin contribution), process automation, organizational flattening, and channel strategy changes. For more on operational cost reduction, see our cost reduction case interview guide.

 

Financial restructuring fixes the balance sheet. Common levers include debt-for-equity swaps, covenant amendments, asset divestitures, equity injections, and refinancing at lower rates. According to Deloitte’s restructuring practice, companies that combine operational improvements with financial restructuring have a 40% higher recovery rate than those that pursue only one approach.

 

Use the signals in the case prompt to determine which type of restructuring to prioritize:

 

Signal in the Case	Type	Why
High cost-to-revenue ratio vs. peers	Operational	The business itself is inefficient
Debt-to-EBITDA above 5x	Financial	Capital structure is unsustainable
Declining revenue with stable costs	Operational	Revenue model is broken
Positive EBITDA but negative free cash flow	Financial	Debt service is consuming cash
Both high leverage and inefficiency	Both	Start with operational to build creditor trust

 

How Do You Reposition the Business for Growth?

 

The final phase happens 12 to 24 months into the turnaround, after the business is financially stable. Repositioning involves investing in the company’s future through new channels, product innovation, or market expansion.

 

In most 30 to 45-minute case interviews, you will not have time to go deep on the repositioning phase. But mentioning it briefly in your recommendation shows the interviewer that you think beyond immediate cost-cutting. A strong closing might sound like: “Once the business is stabilized and generating positive cash flow, I would recommend investing in e-commerce and private-label products to rebuild revenue growth.”

 

How Does a Restructuring Case Differ from a Profitability Case?

 

Many candidates treat restructuring cases like profitability cases. This is a mistake. While both involve analyzing revenue and costs, the objective, urgency, and approach are fundamentally different. The table below breaks down the key differences:

 

Dimension	Profitability Case	Restructuring Case
Objective	Improve margins or grow profits	Ensure the company survives
Time pressure	Low to moderate	High (months, not years)
First question to ask	Is the issue on the revenue or cost side?	How much cash does the company have and what is the burn rate?
Framework focus	Revenue and cost drivers	Diagnose, stabilize, restructure, reposition
Risk if you fail	Lower profits	Bankruptcy or liquidation
Sequencing importance	Moderate	Critical (wrong order accelerates failure)

 

The biggest mental shift is that restructuring cases are about triage and sequencing, not optimization. You are deciding what to cut and in what order, not figuring out how to maximize revenue. Having coached hundreds of candidates, I have seen this distinction be the single most important factor in whether someone aces or struggles with a restructuring case.

 

What Does a Restructuring Case Interview Look Like? (Worked Example)

 

Below is a complete restructuring case walkthrough with a scripted candidate-interviewer dialogue. Use this to practice the exact language and structure you would use in a real interview.

 

Interviewer: “Our client is FreshBite, a mid-size fast-casual restaurant chain with 120 locations across the eastern United States. Revenue has declined from $480 million to $360 million over the past three years. Operating margins have fallen from positive 8% to negative 5%. The company has $200 million in debt with a $50 million tranche maturing in 10 months. They currently have $25 million in cash and are burning $5 million per month. The CEO has hired us to develop a turnaround plan. What would you recommend?”

 

Step 1: Clarify and Diagnose

 

You: “Thank you. Let me make sure I understand the situation. FreshBite is a 120-location fast-casual chain that has seen a 25% revenue decline over three years, from $480 million to $360 million. Margins have swung from positive 8% to negative 5%, so they’ve gone from roughly $38 million in operating profit to losing $18 million per year. They have $25 million in cash, a $5 million monthly burn, and a $50 million debt maturity in 10 months. Our objective is to design a turnaround plan. Is that correct?”

 

Interviewer: “That’s correct.”

 

You: “A few clarifying questions. First, what is driving the revenue decline? Is it lower traffic per store, lower average check size, or both?”

 

Interviewer: “Primarily lower traffic. Same-store traffic has declined 15% over three years. Average check size is roughly flat.”

 

You: “Second, is the traffic decline happening across all 120 locations or concentrated in certain regions or store formats?”

 

Interviewer: “Good question. About 30 locations, mostly in suburban areas, account for 60% of the traffic decline. The urban locations are performing relatively well.”

 

You: “Third, has the company’s cost structure changed meaningfully? For example, have fixed costs like rent and labor remained flat while revenue dropped?”

 

Interviewer: “Yes. Fixed costs are essentially unchanged because the company has not closed any locations. Variable food costs have dropped proportionally with revenue, but fixed costs have stayed flat.”

 

Step 2: Present Your Framework

 

You: “Based on the situation, I’d like to structure my approach in four phases. First, I want to assess the cash runway and immediate survival risk. With $25 million in cash and $5 million monthly burn, FreshBite has roughly 5 months of runway, which is critical because the $50 million debt maturity is in 10 months. Second, I want to identify short-term stabilization actions we can take in the next 90 days. Third, I want to develop a medium-term restructuring plan for the next 3 to 12 months. And fourth, I want to briefly consider how we position FreshBite for growth once it’s stable. Should I walk through each phase?”

 

Interviewer: “Yes, let’s start with stabilization.”

 

Step 3: Stabilize

 

You: “The immediate priority is extending our cash runway from 5 months to at least 12 months. I would recommend three actions in the first 90 days.

 

“First, close the 30 worst-performing suburban locations. These account for 60% of the traffic decline and are likely generating negative contribution margin given their fixed cost burden. If each location carries roughly $1.5 million in annual fixed costs such as rent, labor, and utilities, closing 30 stores saves approximately $45 million per year, or about $3.75 million per month.

 

“Second, freeze all discretionary spending and non-essential capital expenditures. For a chain this size, I’d estimate this saves $8 to $12 million annually.

 

“Third, engage the creditors proactively to extend the $50 million debt maturity by 18 to 24 months. Creditors generally prefer maturity extensions over defaults because they recover more value. Showing them our cost reduction plan gives us credibility in that negotiation.”

 

Interviewer: “Those are good. Let’s say the store closures happen over 60 days. What does the restructuring phase look like?”

 

Step 4: Restructure

 

You: “For the remaining 90 locations, I would focus on operational restructuring across three areas.

 

“First, menu rationalization. Fast-casual restaurants typically generate 80% of revenue from 40% of menu items. I would cut the bottom 25 to 30% of the menu by margin contribution. This reduces food waste, simplifies kitchen operations, and improves speed of service. Based on industry benchmarks, menu optimization typically improves food costs by 3 to 5 percentage points.

 

“Second, labor optimization. With 90 remaining locations, I would implement demand-based scheduling to align staffing with actual traffic patterns. Restaurant chains that adopt demand-based scheduling typically reduce labor costs by 8 to 12% without impacting customer experience.

 

“Third, supply chain renegotiation. Consolidating suppliers and renegotiating contracts with our reduced footprint should yield 5 to 10% savings on food and beverage costs. Our bargaining position actually improves here because we are concentrating volume with fewer suppliers.”

 

Interviewer: “Great. Can you summarize the total financial impact?”

 

Step 5: Quantify and Recommend

 

You: “Here’s the total estimated impact of the turnaround plan:”

 

Lever	Annual Impact (Estimated)
Close 30 underperforming locations	+$45 million in fixed cost savings
Freeze discretionary spending and capex	+$8 to $12 million
Menu rationalization (90 locations)	+$10 to $15 million
Labor optimization	+$8 to $12 million
Supply chain renegotiation	+$5 to $8 million
Total estimated improvement	+$76 to $92 million annually

 

You: “The company was losing $18 million per year at negative 5% margins. This plan targets $76 to $92 million in annual improvements, which more than closes the gap and returns FreshBite to positive operating margins in the range of 6 to 10%.

 

“The primary risk is execution speed. We need the store closures and creditor negotiations to happen within 90 days to avoid running out of cash before the restructuring takes effect. A secondary risk is employee morale. Closing 30 locations means significant layoffs, so I would recommend a clear communication plan and retention bonuses for key managers at the remaining 90 locations.

 

“Once the business is profitable and generating positive cash flow, I would recommend investing in delivery and digital ordering to rebuild traffic at the remaining locations. Fast-casual chains that invested in digital channels between 2020 and 2024 saw digital orders grow to 25 to 35% of total revenue, according to Technomic data.”

 

If you want to practice solving cases like this one with step-by-step guidance, my case interview course walks you through proven strategies for every major case type in as little as 7 days.

 

What Are Common Mistakes in Restructuring Case Interviews?

 

Having interviewed and coached hundreds of candidates, I see the same mistakes come up again and again in restructuring cases. Avoiding these will immediately put you ahead of most candidates.

 

• Skipping the cash position question. If you don’t ask about cash on hand and burn rate in the first two minutes, you are flying blind. Cash runway determines whether you have months or years to work with, and that changes every recommendation you make.

 

• Proposing growth before stabilization. Suggesting that the company invest in marketing, launch new products, or expand to new markets before fixing the cash bleed signals poor business judgment. Stabilize first, grow later.

 

• Using a generic profitability framework. Pulling out a standard revenue and cost breakdown misses the entire point of a restructuring case. The interviewer is testing whether you understand urgency, sequencing, and survival risk.

 

• Treating all actions as parallel. In a restructuring case, order matters. You cannot renegotiate debt without first showing creditors that you are cutting costs. You cannot reposition for growth without first achieving positive cash flow. Show the interviewer that you understand sequencing.

 

• Ignoring risks and tradeoffs. Every restructuring action has downsides. Closing stores means layoffs and potential customer loss. Cutting SKUs means potentially alienating loyal buyers. The best candidates flag 2 to 3 risks proactively and explain how they would mitigate them.

 

• Forgetting the human impact. Real restructuring affects real people. Mentioning change management, communication plans, or retention strategies for key talent shows maturity and consulting-level thinking.

 

What Tips Will Help You Ace a Restructuring Case?

 

These are the specific habits I have seen separate top candidates from average ones in restructuring case interviews:

 

• Always ask about cash runway first. Before any revenue or cost analysis, ask: “How much cash does the company have, and what is the monthly burn rate?” This immediately signals to the interviewer that you understand the stakes.

 

• Sequence actions by speed-to-impact. Present your recommendations in order: immediate actions like spending freezes first, quick wins like headcount reduction second, medium-term actions like supplier renegotiation third, and long-term actions like business model transformation last.

 

• Address operational issues before financial ones. Creditors grant concessions when they see that management is fixing the underlying business. Leading with operational improvements builds credibility for any financial restructuring conversations.

 

• Distinguish cyclical from structural decline. If you can identify whether the company’s problems are temporary or permanent, you can tailor your recommendations accordingly. This is an insight that most candidates miss entirely.

 

• Use specific numbers in your synthesis. Instead of saying “we should cut costs,” say “closing 30 locations saves $45 million per year in fixed costs.” Specificity demonstrates analytical rigor and makes your recommendation more credible.

 

• Flag risks proactively. End your recommendation by naming 2 to 3 risks and briefly explaining how you would address them. This mirrors what real consultants do and shows the interviewer that you think beyond the spreadsheet.

 

For more tips and strategies across all case types, including profitability, market entry, and M&A, check out our McKinsey case interview guide and our MBB case interview guide.

 

To practice with over 100 free case examples, visit our case interview examples and practice page.

 

Frequently Asked Questions

 

How Often Do Restructuring Cases Come Up in Consulting Interviews?

 

Restructuring cases appear in roughly 10 to 15% of consulting interviews at firms like McKinsey, BCG, and Bain. They are more common at turnaround-focused firms such as AlixPartners, FTI Consulting, and Alvarez & Marsal, where they may account for 30 to 50% of case interviews. Even at generalist firms, restructuring elements frequently appear within profitability cases, so understanding the framework is valuable regardless of which firm you are interviewing at.

 

What Is the Difference Between Operational and Financial Restructuring?

 

Operational restructuring fixes the business itself by addressing cost structure, supply chain, product mix, or organizational design. Financial restructuring fixes the balance sheet by renegotiating debt, selling assets, or converting debt to equity. Most turnarounds require both. In a case interview, always lead with operational restructuring because it demonstrates stronger business judgment and builds credibility for financial negotiations.

 

Should You Use the Profitability Framework for a Restructuring Case?

 

No. A standard profitability framework (revenue vs. costs) misses the critical elements of a restructuring case: urgency, cash runway, sequencing, and survival risk. Use a restructuring-specific framework that follows the Diagnose, Stabilize, Restructure, Reposition sequence. You can incorporate profitability analysis within the diagnosis phase, but it should not be the overall structure.

 

What Industries Are Most Common in Restructuring Case Interviews?

 

Retail, restaurants, manufacturing, and airlines are the most frequent settings for restructuring cases because they have high fixed costs, complex operations, and well-understood business models. However, restructuring cases can appear in any industry. The framework and approach remain the same regardless of sector.

 

How Do You Handle a Restructuring Case at McKinsey vs. BCG vs. Bain?

 

The framework is the same across all three firms. The difference is in interview format. McKinsey uses interviewer-led cases where the interviewer directs you through specific questions. BCG and Bain use candidate-led cases where you drive the direction of the analysis. In an interviewer-led format, present your framework briefly and answer each question with clear sequencing. In a candidate-led format, take more ownership in deciding which areas to explore first and explain your reasoning for the order.

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