Distress Restructuring?

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Distress Restructuring?

What is distress restructuring? How do we define it? When is it carried out? How?

  Jaap de Jonge
Editor, Netherlands

Distress Restructuring

The term distress restructuring belongs in the Corporate Finance realm rather than change and organization. When a firm is in a financial crisis or facing bankruptcy, this umbrella term is used to indicate the corporate turnaround from severe financial distress through methods such as Debt/Equity Restructuring, Working Capital Management and Corporate Valuation.
Therefore in distress restructuring, the term "restructuring" is not used in an organizational, but rather in a financial perspective.

  Srinivasa Rao Kilaru
Business Consultant, India

Meaning of Distress Restructuring

Distress causes due to illiquidity due to poor structuring of working capital at various levels (viz work-in-progress, bills receivable etc.) of business. Such a company must undertake restructuring strategies (incentives for early payment, delaying in payments to creditors etc) and activities to come out of this situation. Those activities are called distress restructuring.

  Ashok Kella
Manager, India

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  Rohini Kamble

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