Costs associated with the requirement that management divert its attention away from strategically managing a corporation in favor of spending time with financial attorneys could be best described as

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Indirect bankruptcy costs refer to costs that are not directly related to the bankruptcy process itself, but rather arise as a result of the process, such as having management diverted from other important tasks. Direct bankruptcy costs refer to costs that are directly associated with the bankruptcy process, such as legal and administrative fees. Managerial-shareholder related agency costs refer to costs that arise from conflicts of interest between managers and shareholders. None of these options fully represent the costs described in the question, but the best fit is indirect bankruptcy costs.

Costs Associated with the Requirement That Management Divert Its Attention