Debt Restructuring School: Module 2 - Distressed Debt and Restructuring

By the end of this programme, Participants will:

• Be able to recognise early warning signals arising from global, domestic, sectoral and firm-specific factors as well as market signal s and failure prediction models;
• Be able to identify the most common forms of creative and fraudulent accounting, and make appropriate adjustments to reflect a TRUEr view;
• Be able to develop action plans aimed at protecting the lender’s position and restoring the borrower to the good book;
• Be able to develop “Plan “”, “Plan B” and “Plan C” – with the first two being variants on going concern restructurings and the latter involving execution against collateral and/or insolvency;
• Understand the circumstances where a reservation of rights letter should be issued;
• Be aware of the need to enhance the lender’s information base and how this might be achieved via an independent business review, including the challenges with this intervention;
• Understand that the decision on whether to enforce needs to be taken into the context of the relative strengths and wishes of other key stakeholders;
• Be able to conduct a structured approach to exit analysis, leading to a conclusion on which option is likely to deliver the highest present value to the lender;
• Appreciate the weakness of “extend and pretend” solutions, amounting to “kicking the can down the road” and how these can be avoided;
• Develop a clear view on the components of a successful restructuring;
• Be able to reach balanced judgements on whether to provide new money;