Liability management exercises (LMEs) have become a way of life for many financially stressed and distressed businesses facing liquidity issues, looming debt maturities, or both. LMEs may buy time for a troubled company, but do not solve (and may even complicate) operational and financial problems and frequently result in litigation that eventually pushes borrowers into bankruptcy. The analytical methodology used by institutional investors to identify and exit positions before they become distressed is equally valuable for credit managers looking to spot troubled customers and reduce their exposure before bad becomes worse. This program uses a real case study, Wesco Aircraft Holdings (Incora), to discuss the mindset and analytical tools used by bond investors to preemptively identify financial stress before it turns into distress. The case study will highlight trends and warning signs that can indicate a risk of bankruptcy months or even years in advance. Finally. the speakers will discuss the recent trend in court decisions that will shift the LME landscape for troubled customers and the impact on trade creditors.
Speakers:
- Andrew Behlmann, Partner, Lowenstein Sandler LLP
- Bruce S. Nathan, Partner, Lowenstein Sandler LLP
