> For the complete documentation index, see [llms.txt](https://docs.ibis.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ibis.app/platform/after-a-default.md). # Recovery ## Overview In recovery, holders share recoveries through the recovery pot. Yield accrual has ended, and the facility uses a fixed recovery conversion price. The figures shown in the apps and described here are informational. The Master Lending Agreement governs amounts, dates, defaults and remedies. ## Recovery balances At default, withheld principal becomes ordinary facility cash, and cash above the reserve floor becomes the recovery pot's first funding. Funding of owed value from facility cash stops. Any protected withdrawal window ends, with its unpaid value remaining owed alongside other unpaid withdrawals. A withdrawal is funded only when the facility holds cash to fund it, normally from borrower repayment. The facility fixes the recovery conversion price at default, in asset units per share to 18 decimals. This price remains unchanged throughout recovery. **Recovery weight** $$ u\_{owed} = \left\lfloor \frac{O}{I\_{def}} \right\rfloor,\qquad S = s\_{out} + u\_{owed} $$ Where: * $$O$$ is the owed value unfunded at the default, all lenders, in asset units, 6 decimals. * $$I\_{def}$$ is the price fixed at default, in asset units per share, to 18 decimals. * $$u\_{owed}$$ is the number of recovery units that represent the unfunded owed value, to 18 decimals. * $$s\_{out}$$ is the number of shares outstanding at the default, including shares held in withdrawal requests, to 18 decimals. * $$S$$ is the recovery weight: the total number of recovery units across which every recovery is shared, to 18 decimals. Recovery units are rounded down to 18 decimals; the sum is exact. The bound is $$S > 0$$: the facility refuses a default that would leave zero recovery weight. Illustrative example: unfunded owed value of 50,225.000000 at a price fixed at default of 1.004500000000000000 is represented by 50,000.000000000000000000 recovery units. With 950,000.000000000000000000 shares outstanding, the recovery weight is 1,000,000.000000000000000000 units. Each share outstanding at default counts as one recovery unit. Units representing unfunded owed value have the same weight until the lender converts that value into shares. ## Recovery ### Converting an unpaid withdrawal Subject to the facility's current operating status, a lender with unpaid owed value at default can convert that value in full into shares at the price fixed at default. That value already counts toward recovery weight, so conversion leaves the weight unchanged. Conversion creates neither cash nor a claimable balance. The lender receives any recovery on the converted value through recovery claims. **Converting an unpaid withdrawal** $$ s\_{conv} = \left\lfloor \frac{o}{I\_{def}} \right\rfloor $$ Where: * $$s\_{conv}$$ is the minimum number of shares the facility issues to the lender, to 18 decimals. * $$o$$ is the lender's unpaid owed value, across all of its withdrawal requests, in asset units, 6 decimals. * $$I\_{def}$$ is the price fixed at default, in asset units per share, to 18 decimals. The result is rounded down to 18 decimals. The lender can receive slightly more shares than this minimum, never fewer, and $$S$$ stays unchanged. The bound is $$o > 0$$; the facility refuses conversion when the lender has no unpaid owed value. Illustrative example: unpaid owed value of 2,009.000000 at a price fixed at default of 1.004500000000000000 converts to at least 2,000.000000000000000000 shares. ### Funding the recovery pot After the initial funding at default, any eligible payer, including the borrower, can fund the recovery pot. Post-default repayment enters the pot in full, without a cap, and each payment is shared across the recovery weight. Funding is subject to [Eligibility, compliance and agreements](/getting-started/compliance-perimeter.md). {% hint style="danger" %} A direct token transfer to the facility is not a payment into the recovery pot and is not credited to any holder. {% endhint %} ### Recovery claims When a holder makes a recovery claim, the facility cancels the shares claimed and records an equal number of recovery units. The holder can use wallet-held shares and shares in withdrawal requests. Recovery units cannot be transferred and keep collecting later recoveries, so the holder can claim again without exchanging more shares. Each claim pays cumulative entitlement less amounts already claimed. A restricted address's claim is credited to the compliance escrow under that address. **Entitlement and payout** $$ e\_h = \left\lfloor u\_h \times \frac{D\_{total}}{S} \right\rfloor,\qquad \text{payout} = e\_h - c\_h $$ Where: * $$e\_h$$ is the holder's cumulative entitlement, in asset units, 6 decimals. * $$u\_h$$ is the holder's units: the shares exchanged in this claim plus the recovery units the holder already has, to 18 decimals. * $$D\_{total}$$ is the cumulative recovery funding: everything the recovery pot has received since the default, including the cash above the reserve floor at the default, in asset units, 6 decimals. * $$S$$ is the recovery weight fixed at the default, to 18 decimals. * $$c\_h$$ is the amount the holder has already claimed from the recovery pot, in asset units, 6 decimals. Each claim is rounded down to 6 decimals, with fractions below the smallest asset unit retained by the facility. A payout can be slightly lower than the formula's value, with the difference also retained. The bound is $$\text{payout} > 0$$; the facility refuses a zero-payout claim. Illustrative example: with a recovery weight of 1,000,000.000000000000000000 units, after cumulative recovery funding of 25,000.000000 a holder exchanging 40,000.000000000000000000 shares is entitled to 1,000.000000 and receives 1,000.000000. After a further 10,000.000000 of funding, the same holder's entitlement is 1,400.000000, so a second claim pays 400.000000. A holder that first claims after both fundings, exchanging 10,000.000000000000000000 shares, receives 350.000000. A share carries its full entitlement since default whenever it is exchanged. Funding received equals funding claimed, unclaimed entitlement and retained rounding differences. Claim timing and frequency therefore cannot create or lose entitlement. ### Other actions In recovery Previously funded balances stay claimable, and pending deposits stay refundable. Deposits, withdrawal requests and settlement end permanently. [Facility states and permitted actions](/platform/facility-states.md) lists participant actions by state.