Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistFeaturesBankruptcyCorporate EntitiesLitigation

Corporate Bankruptcies and the Restructuring Solution

By Brian Wanat
May 01, 2023

In January 2023 alone, three well-known U.S. retailers filed for Chapter 11 or announced they were preparing to file, citing the slowing economy, rising interest rates, supply chain issues and increased competition, among other issues. The recent, big-name Chapter 11 filings have brought to the light the importance of insurance solutions for companies in financial distress, as companies in this situation face oftentimes new and uncharted issues such as deal facilitation, collateral options to support loss sensitive programs, close out transactions, personal asset protection, D&O insurance, surety & performance bonds and workers compensation, among others.

|

Key Indicators of Future Filings

Bonds trading at distressed levels are just one indicator of future Chapter 11 filings. According to S&P Global, the recent rapid increase in at-risk credits (ARCs) is one indicator to keep an eye on. ARCs are U.S. TRACE-traded bonds that are not in default, with prices that generate yields of more than 10%. ARCs are a relatively observable indicator of distress in the marketplace, so the number count and the dollar amount are the tip of the iceberg of financial distress, according to the credit rating agency.

Deteriorating credit ratings and stock prices are also indicators, though more micro than macro. Higher real interest rates and tighter bank lending standards may also signal more Chapter 11 filings on the way.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
How Secure Is the AI System Your Law Firm Is Using? Image

In a profession where confidentiality is paramount, failing to address AI security concerns could have disastrous consequences. It is vital that law firms and those in related industries ask the right questions about AI security to protect their clients and their reputation.

COVID-19 and Lease Negotiations: Early Termination Provisions Image

During the COVID-19 pandemic, some tenants were able to negotiate termination agreements with their landlords. But even though a landlord may agree to terminate a lease to regain control of a defaulting tenant's space without costly and lengthy litigation, typically a defaulting tenant that otherwise has no contractual right to terminate its lease will be in a much weaker bargaining position with respect to the conditions for termination.

Pleading Importation: ITC Decisions Highlight Need for Adequate Evidentiary Support Image

The International Trade Commission is empowered to block the importation into the United States of products that infringe U.S. intellectual property rights, In the past, the ITC generally instituted investigations without questioning the importation allegations in the complaint, however in several recent cases, the ITC declined to institute an investigation as to certain proposed respondents due to inadequate pleading of importation.

The Power of Your Inner Circle: Turning Friends and Social Contacts Into Business Allies Image

Practical strategies to explore doing business with friends and social contacts in a way that respects relationships and maximizes opportunities.

Authentic Communications Today Increase Success for Value-Driven Clients Image

As the relationship between in-house and outside counsel continues to evolve, lawyers must continue to foster a client-first mindset, offer business-focused solutions, and embrace technology that helps deliver work faster and more efficiently.