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ARTICLE · 23 DECEMBER 2020

What We're Reading This Week [December 21, 2020]

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The Wall Street Journal reports on the growth of dividend recapitalization transactions during the COVID-19 pandemic...

United StatesInsolvency/Bankruptcy/Re-Structuring
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The Wall Street Journal reports on the growth of dividend recapitalization transactions during the COVID-19 pandemic by private equity controlled companies. That growth stands in contrast to prior economic downturns. [WSJ; Dec 17, 2020]

Reporting from Yahoo Finance addresses the growing control that investment firms and hedge funds exert over commercial restructuring efforts as a result of increasingly favorable terms granted to such entities in connection with providing critical liquidity during periods of financial hardship. The reporting further indicates that between 1995 and 2005, 10% of bankruptcy loans given to publicly traded firms were linked to a specific chapter 11 exit plan while, between 2015 and 2018, that figure rose to 50%. [Yahoo Finance; Dec. 17, 2020]

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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