Debt Restructuring

Knowledge Center

   

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print
 
Debt Restructuring

Definition Debt Restructuring. Description


Debt Restructuring is a court ordered or mutual agreement, used by organizations (facing Cash Flow problems or other financial trouble) to reduce the amount of debt obligations and/or renegotiate the terms of debt agreements in order to achieve certain advantages, which typically include improving or restoring Liquidity or to prevent foreclosure and liquidation, and to continue operations. Is a major part of Recapitalization.


Why Debt Restructuring? Reasons

Instead of forcing an organization into bankruptcy, lenders frequently agree to restructure the loan obligations of distressed debtors, allowing them to remain in business.

Lenders are generally willing to restructure a debtor's loan to help the organization resolve the present financial difficulties and stay in business, as they often receive more through a restructuring than through foreclosure or bankruptcy. The distress Liquidation Value of any firm is generally relatively low.

Corporate debt restructuring can be a way to move a relatively healthy company forward and help to remove some of its burden of the past. A corporate restructuring can give a company a new life and may provide it with the cash flow it needs for a meaningful business restructuring.


Restructured Loans

A restructured loan can differ from the original loan agreement in several ways, for example:

  • Scheduled interest and principal payments may be reduced or eliminated (Debt Forgiveness).
  • The debtor and lender can settle the loan for cash, other assets, or equity interests (Debt Conversion).
  • The repayment schedule may be extended over a longer time period (Debt Rescheduling).

Debt Restructuring Categories

Examples of debts categories which can be restructured are:

  • Machinery
  • Equipment rentals/leases
  • Business loans or mortgage on business property
  • Capital payments due for improvements/construction
  • Lawsuits and judgments
  • Invoices and statements
  • Disputed bills
  • Problem debts

Debt Restructuring Forum
  Quotes on Restructuring Debt. Quotations
Hi, do you know of a remarkable, humorous quote by a famous person or a proverb related to debt restructuring?
Please enter a reaction to share it for other people to enjoy! Please use this template:
Author Name Year of Birth - Year of Death, s...
     
 

Debt Restructuring Special Interest Group


Special Interest Group

 

Best Practices - Debt Restructuring Premium

Expert Tips - Debt Restructuring Premium

Resources - Debt Restructuring Premium
 

News

Debt Restructuring
     
 

Videos

Debt Restructuring
     
 

Presentations

Debt Restructuring
     
 

More

Debt Restructuring
     

Compare with: Financial Covenants  |  Recapitalization  |  Off-Balance Sheet Financing  |  Contingent Liabilities  |  Z-Score  |  Liquidation Value

Special Interest Group Leader

You here


 

Return to Management Hub: Finance & Investing


More on Management  |  Return to Management Dictionary  | 


This ends our Debt Restructuring summary and forum.

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2016 12manage - The Executive Fast Track. V14.1 - Last updated: 8-12-2016. All names tm by their owners.