Restructuring Trusts – A More Efficient Way To Recover Debt?

In times of financial difficult and a challenging market environment, establishing a restructuring trust provides an insolvency-proof structure that meets the demand of the financing banks for an immediate change of control in the company while ensuring a professional M&A process with an upside for all stakeholders.

The dilemma

When a debtor company experiences a severe financial cri sis, the financing banks usually face a dilemma. They can either extend existing loans and provide additional financing in order to give the company time to implement restructuring measures and over come the crisis, or they can "pull the plug" and try to recover as much as possible by enforcing existing security rights.