Section I defines, for purposes of this Article, the broad class of instruments called “junk bonds.” Section II then describes the debt/equity classification problem and why it now assumes importance in the bankruptcy arena. Section III discusses the sources of authority enabling bankruptcy courts to re-characterize junk bonds as equity when appropriate. Section IV analyzes the theoretical bases for categorizing junk bonds. Section V provides a road map through the maze of junk bond features, describing those characteristics whose presence or absence in a particular issue will help determine how bankruptcy should deal with such an issue. Finally, Section VI discusses important related problems in dealing with junk bond issues in bankruptcy, including the ways in which the debt/equity issue may provide a new viewpoint on challenges to leveraged buyouts under fraudulent transfer law.