Pryor Cashman Partner Seth Lieberman, Chair of the Bankruptcy, Reorganization + Creditors' Rights Group and Co-Chair of the Corporate Trust Practice, spoke with Bloomberg Law about the growing economic and regulatory uncertainty—driven by tariffs—that is contributing to a rise in business bankruptcies across industries, including automotive and solar energy.
In "Tariff Uncertainty to Drive New Bankruptcy Cases Across Sectors," Seth comments on the ripple effects of stalled trade decisions and broader macroeconomic instability:
"The uncertainty around the effects of tariffs is something that is, given the broader economy, creating a pregnant pause."
He also weighed in on the use of liability management exercises (LMEs), a restructuring tool that has gained traction among distressed companies trying to avoid in-court bankruptcy proceedings. While these deals can provide short-term relief, Seth cautioned against the potential long-term risks:
"There is a concern over what repeated use of an LME means for the capital structure and financial health of a business."
Seth's insights come amid a volatile financial landscape marked by shifting trade policies and uncertainty surrounding global supply chains—all of which are pushing more companies toward restructuring strategies, both in and out of court.
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