Initial analysis in restructurings

This Overview is a guide to the Banking & Finance content within the Initial analysis in restructurings subtopic, with links to appropriate materials.

Whether you are acting for the debtor, creditor, potential purchaser or shareholder and regardless of which jurisdiction the restructuring takes place in, the first step is to obtain all relevant security documentation and conduct due diligence on the debtor company or group of companies. For more information on issues to consider at the outset and an overview of the due diligence process which will typically be undertaken, see Practice Note: Restructuring—initial steps.

A successful restructuring needs a viable underlying business, although typically this will be burdened by too much debt meaning it cannot service interest and principal repayments which are falling due.

Different solutions for the debtor business are available depending on the level of distress, including:

1. •

   a quick fix change to current management

2. •

   a consensual restructuring, using a standstill agreement and restructuring agreement

3. •

   a non-consensual restructuring, using a company voluntary arrangement (CVA), scheme of arrangement or pre-pack administration, and

4. •

   formal liquidation or enforcement of security

For information