Worldwide: Financial Restructuring

Lowenstein Sandler partners discuss the critical intersection of executive compensation and bankruptcy law, exploring when companies should transition to distressed compensation planning...

David L. Zive and Jacob E. Trachtenberg examine the distressed note sale market from both buyer and seller perspectives, analyzing the legal and transactional frameworks that govern these complex transactions. The article provides practical guidance for navigating the current market landscape and understanding the key considerations in distressed debt transactions.

When sophisticated parties to a restructuring agreement provide that a fee is triggered if a debtor “raises, or “commits to raise” alternative financing, does the word “commits” require a binding contractual obligation or something less? The First Department addressed this very question in a recent decision entitled Aurelius Capital Master Ltd. v Hertz International Limited, 2026 NY Slip Op 05369 (1st Dept Sept. 22, 2026). The 4-1 decision affirmed a post-trial judgment of approximately $15.9 million in favor of holders of unsecured notes issued by a Hertz affiliate, holding that “commits to raise” encompasses significant affirmative steps toward securing alternative financing, even absent a binding agreement.

In the United States, restructuring and distressed transaction activity continue to be shaped by elevated interest rates, refinancing pressure, persistent inflation, and ongoing geopolitical uncertainty. Although corporate credit conditions improved somewhat during 2025, many companies remain burdened by debt incurred during the low-rate environment and are facing increasingly complex refinancing challenges as maturities approach.

Artificial intelligence tools offer turnaround and restructuring practitioners powerful capabilities to manage complexity and time pressure, but deploying them effectively requires understanding...

Companies facing financial distress often miss early warning signs that could mean the difference between recovery and insolvency. From maxed-out credit lines and covenant breaches to deteriorating fundamentals and reporting red flags, recognizing these indicators early allows businesses to engage turnaround advisors who bring critical experience and perspective to navigate challenges before they become crises.

Liability management exercises have become a popular tool for restructuring distressed debt outside of court, but data reveals an 86% failure rate within two years.

Third party releases (3PRs) have long been a feature of restructuring processes in key international restructuring centres including England, Singapore and the United States. However, recent court decisions in all three jurisdictions have brought renewed scrutiny to the circumstances in which such releases can be granted and their permissible scope.

A Texas bankruptcy court has ruled that lenders who participated in Serta Simmons Bedding's 2020 uptier transaction violated the credit agreement's pro rata sharing provision...