Corporate restructurings: We can work it out
In this downturn, corporate restructurings will be driven by problems at the banks rather than the struggling companies themselves. Louise Bowman explains why.
WHEN THE US Congress threw out the bail-out proposal for auto manufacturers Chrysler, Ford and GM in early December, it raised the once unthinkable prospect of these companies entering Chapter 11 insolvency. The logistics involved in trying to restructure their balance sheets do not bear thinking about but the beleaguered state of the US auto industry stands as an example writ large of the kind of problems that will be faced by corporates worldwide in 2009. And the result is another industry experiencing the kind of demand that Hummer manufacturers can only dream of: corporate restructuring.
"We have had 17 years of uninterrupted growth. Many people simply do not have any experience of how to manage in a downturn"
Barry Ross, PricewaterhouseCoopers
Corporate restructurers are in the very rare position of bracing themselves for a boom in 2009. The banks themselves are staffing up workout groups, and lawyers and insolvency experts are in high demand. "We have had 17 years of uninterrupted growth," muses Barry Ross, corporate restructuring partner at PricewaterhouseCoopers in London.