Restructuring in Rough Seas: An Overview of the Dynamics for Working Out Troubled Loans in an Uncertain Global Environment

By Steven T. Kargman

In the best of times, complex corporate debt restructurings can be a very challenging process. But in the current environment, in the midst of a global financial crisis and a slowdown in the global economy, such debt restructurings are likely to become even much more vexing. The global financial crisis will mean that companies in need of refinancing may not be able to find such financing, and this lack of financing could push certain companies into debt restructurings or insolvency proceedings. In the ensuing debt restructurings or insolvency proceedings, the parties may not be able to rely on readily available financing necessary to keep troubled or insolvent businesses operating. Moreover, the global economic slowdown may mean that there can be no short-term assurance of steady

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