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OCTOBER 2013
Legal Expert Board
31
Insolvency and Restructuring
Insolvency and restructuring rates inevitably rise during periods of economic turbulence, and the global financial crisis has left many companies with shrinking asset values and considerable debt with little or no chance of repayment. Market losses over recent years or so dampened spirits regarding the expectations of recovery, lowering business confidence globally and enhancing the risk of falling back into recession.
The restructuring and insolvency market has undergone considerable change and development over recent years and according to a recent report, the global financial crisis has significantly contributed to an increase in insolvency work, keeping bankruptcy lawyers across the world very busy. Insolvency is viewed as the least favourable outcome, and creditors and stakeholders are increasingly turning to restructuring strategies in an effort to avoid becoming insolvent, preferring options that offer greater value return potential.
However, it seems that the future may be brighter for some in terms of insolvency
rates with Bloomberg recently reporting that the number of U.S. commercial bankruptcies dropped by 22 per cent during the first nine months of this year, compared with last year. Similarly, it was also recently reported that UK insolvency rates have remained stable for the last twelve months.
To examine this subject further, and look at the effects the new insolvency law will have on the sector, over the next few pages, Lawyer Monthly looks at the world of Insolvency and Restructuring across the globe, focusing on the trends occurring and the legal issues that surround the practice area. LM