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2019-04-doc6 Restructurings and workouts

In less than a decade, the topic of restructuring and workout has risen to the top of the legislative agenda of many countries, in the EU and beyond. In the same period insolvency practice has gradually grown into its renewed role: understanding the diversity in creditors’ interests, to think (allow me) outside the narrow box of insolvency liquidation and get away of applying its principles and approaches unamended to out-of-court consensual restructurings, the entry into the market of hedge funds and purchasers of claims which indeed have different interests compared to unsecured creditors. The biggest hurdle is attitude and culture: shaking of moral feathers (debt is ‘sin’) and embrace a market response: insolvency is a business risk as any other. In their renewed role, insolvency lawyers should develop their skills in contract negotiating outside the shadow of insolvency law.

In the third edition of ‘Restructuring and Workouts: Strategies for Maximising Value’, edited by Graham Lane, Globe Law Publishing, London, 2019, several of these aspects are touched upon, such as contributions on the restructuring and workout environment in Europe, the view of the World Bank Group on these themes in the light of economic development, valuation of distressed businesses, pre-packs at an operational level ( including ‘post-packs’ with a buy-back option)) and restructuring in specific industries (shipping and offshore, retail).

In this edition the spotlight is on legislative developments in France, Spain and the US. The World Bank authors see common themes across jurisdictions when reforming insolvency legislation: addressing the need to acknowledge that insolvency is an important and integral part of the business cycle, to ensure proper implementation on an institutional level (practitioners, courts, advising agencies of committees), facilitating business restructuring not being shut by tax consequences of debt write-off, extending social protections to those affected by business failure.

An interesting topic underlines the skills practitioners need to succeed in the area of pre-insolvency, ie maximising stakeholder value, that is how to understand and deal with all diverging interests during a restructuring process, and how to find common ground between stakeholders with conflicting agendas? The chapter on the global Lehman bankruptcy provides an instructive account of the specific topics to the bankruptcy of the world’s fourth-largest investment bank, including the use of a global protocol, bar dates, secondary trading, the ‘waterfall’ of different claims, ranking of subordinated claims and currency conversion.

This third edition is timely as Europe is on the brink of implementing (in 2 or in 3 years, when a Member States encounters particular implementing difficulties) the Preventive Restructuring Directive in national legislations. In new or renewed legislation, the key word is rescue of viable business. The third edition of the book provides useful practical tools to maximise value in restructuring situations.

Graham Lane (consulting editor), Restructuring and Workouts. Strategies for Maximising Value, 3rd ed., Globe Law and Business 2019. ISBN 9781787421882

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Note: this book I received free of charge from the publisher with the request to announce it or to review it on my blog at