Restructuring and Debt Obligations

Skadden, Arps, Slate, Meagher & Flom LLP


Expansive Stimulus and Monetary Policy Helped Limit Restructurings, but Debt Maturities Loom
2022 Insights

Despite the devastating impact of COVID-19, default and bankruptcy rates remain low. Whether this will continue or not depends on inflation, government policy and the capital markets.

International Companies Turn To US Restructurings for COVID-19 Relief
Insights — June 2021

Foreign entities need only minimal U.S. ties to qualify for relief under the country’s sophisticated and debtor-friendly reorganization laws.

When Arbitration Meets Bankruptcy: Considering Arbitration Options in the Wake of a Growing Rise in Corporate Insolvencies
September 30, 2020 — Quarterly Insights

Companies with arbitration clauses in their commercial agreements may wish to consider the impact of insolvency on their options for pursuing pending or future arbitrations, especially as the long-term effects of COVID-19 play out as more companies consider restructurings.

Amending a Debt Instrument Trading at a Discount: Beware of Tax Consequences
May 29, 2020

In light of the ongoing economic uncertainty, many companies are considering amending their credit agreements and other debt instruments, either to minimize the likelihood of breaching financial covenants or to rework payment schedules. However, companies should keep in mind that amending a debt instrument which is trading at a discount to par in the secondary market can result in cancellation of indebtedness income that is currently includible for tax purposes without any associated cash — even in situations where the principal amount of the debt remains unchanged.

COVID-19: Germany Update — Suspension of Obligation To File an Insolvency Application and Certain Effects
April 9, 2020

With the intention of mitigating the effects of the COVID-19 pandemic, the obligation of companies in Germany to file insolvency applications was suspended if the company is illiquid or over-indebted. The suspension applies until September 30, 2020, and may be extended until March 31, 2021, by the German Federal Ministry of Justice and Consumer Protection. 

COVID-19 Entertainment Update: Guidance for Entertainment Companies
March 27, 2020

As the coronavirus/COVID-19 pandemic continues to have major repercussions across the entertainment industry, companies are finding ways to navigate the storm. There is no single playbook for mitigating the impact of the crisis but rather a wide range of strategies and approaches for boards and management teams to consider.

Oil Price War and Challenging Debt Markets: Tax Risks and Strategies for Upstream and Midstream Companies
March 23, 2020

As many upstream and midstream companies grapple with the prospect of severe liquidity constraints due to the rapid deterioration of the commodity and debt capital markets, borrowers evaluating approaches to capital structure management should consider the current tax landscape before embarking on a plan, particularly if that plan involves transactions such as a debt modification, sale/leaseback transactions involving real estate investment trusts, joint ventures and volumetric production payments. Distressed companies will need to carefully consider the significant consequences outlined here as they reevaluate their capital structures.

Coronavirus/COVID-19 Update — Corporate Restructuring Challenges
March 18, 2020

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