Scary Times for U.S. Companies Spell Boom for Restructuring Advisers

Scary Times for U.S. Companies Spell Boom for Restructuring Advisers

Corporations are saving cash, cutting costs and refinancing debt to manage the economic fallout of the coronavirus. Restructuring and bankruptcy experts are already getting calls.
Freedom Mortgage, one of the nation’s largest mortgage lenders, is looking for additional financing as millions of homeowners are expected to stop making mortgage payments. The Cheesecake Factory said this past week it wouldn’t be able to make rent payments on its leases because of lost business. And giant companies from Kraft Heinz to Ford have tapped billions of dollars in credit from banks in preparation for an uncertain future.
These are scary times for American companies as they grapple with the hit to their businesses from the shutdown of major parts of the economy from the coronavirus. But for one group in the financial services industry — restructuring and bankruptcy advisers and lawyers — the emerging signs of pain for companies, both big and small, spell booming business.
Corporations across a wide swath of industries and in vastly different financial straits are being forced to stretch their cash, cut costs, avoid loan defaults and prepare to potentially reorganize their businesses.
Restructuring experts are finding themselves in demand, anticipating that companies will not be able to make good on their commitments on time and may seek to negotiate new terms with lenders, vendors, employees and other parties.

Dion Hayes, a restructuring attorney at McGuireWoods based in Virginia, said he was getting lots of calls from “businesses that rely on foot traffic.” Sharon Weiss, a bankruptcy lawyer with Bryan Cave in Los Angeles, said she was working with a client in the entertainment business that was looking for another investor to shore up its finances.
And Simon Freakley, the chief executive of AlixPartners, a restructuring consulting firm, said he has had conversations with directors of big companies that are normally flush with cash, but now must do cash-flow projections to simply see how they can get by for the next few months.

By New York Times

Comentarios

  1. The super economists30 de marzo de 2020 a las 9:17 p.m.

    It is very interesting to see how American companies seek to make a plan to cushion this crisis. I see now that an economist is also working to plan for the restructuring of companies with financial problems. For us as students, it is an opportunity to see how they are in practice. Using the acquired knowledge, I hope that this situation does not go any further, but if it is, we should see it as an opportunity for growth, to improve ourselves as a society.

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  2. Diana Calleja Lobato31 de marzo de 2020 a las 4:53 p.m.

    That's something necessary and simultaneously sad, but companies cannot do nothing because of the situation. It's clear that companies will still cutting costs until this pandemic pass.

    ResponderBorrar

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