Insolvency lawyers discuss how this recession is different:
Aubrey Kauffman of Fasken Martineau Dumoulin in Toronto observes that “the key departure from previous downturns is that potential purchasers don’t have access to financing to buy businesses in distress — even if these businesses are fundamentally sound.” [...]
“Other downturns have been more focused,” Mr. Kauffman says. “We’ve had the likes of real estate busts and the dot.com bubble burst, but nothing like this — where the pain is so pervasive and we’ve gone from a position of unlimited liquidity to no liquidity in 10 months.” Restructuring lawyers say they are shifting their efforts. “We’re looking a lot less at identifying an exit strategy and more at shifting everyone to surviving this terrible situation, preserving the business, and hopefully keeping the existing stakeholders in place long enough to find a better solution,” Mr. McElcheran adds.
Topics: Credit, Hunkering down, Survival
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