BusinessBusiness RecoveryStakeholders complicate insolvency process

Stakeholders complicate insolvency process

Evolutionary shifts in the economic interests of failing companies are leading to greater complications in the already intricate restructuring process, according to insolvency practitioners at PricewaterhouseCoopers.

Steven Pearson, PwC partner, said: ‘Investors can enter the game at the distress level and change the game of play. I think you’ll see an increasing amount of companies held to ransom and an increasing amount of companies failing because they are not able to identify the creditors.’

Although the phenomena has yet to become widespread in the UK due to the traditional ‘gentlemen’s approach’, there is a danger that it will grow here because the ‘former rules have past into ancient history’.

Offering an example of how difficult the process can be, Pearson, administrator to Enron Europe, said in order to secure the sale of one Enron asset – the right to take gas from the North Sea – they had to get consent from over 100 stakeholders.

Pearson said: ‘If you don’t anticipate all the stakeholders the danger is when you need to get an asset restructured you could fall foul.

‘It’s human nature to turn around and ask for something if you’re in a really strong bargaining position.’

Related Articles

Investment firm acquires Avon Steel Company Limited

Business Recovery Investment firm acquires Avon Steel Company Limited

1w Emma Smith, Managing Editor
Manchester law firm enters into administration

Business Recovery Manchester law firm enters into administration

1w Emma Smith, Managing Editor
KPMG appoints new global head of insolvency

Business Recovery KPMG appoints new global head of insolvency

4w Emma Smith, Managing Editor
EY hired by Carillion to review finances

Accounting Firms EY hired by Carillion to review finances

5m Alia Shoaib, Reporter
Using insolvency as a debt recovery tool

Business Recovery Using insolvency as a debt recovery tool

6m Emma Smith, Managing Editor
UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

Business Recovery UK government should support mid-sized businesses to create a ‘new economy’ post-Brexit, says BDO report

8m Alia Shoaib, Reporter
Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

Business Recovery Over 800 jobs saved as Endless LLP acquires Jones Bootmaker

9m Emma Smith, Managing Editor
FRP Advisory expands operation with new office, partner appointments

Accounting Firms FRP Advisory expands operation with new office, partner appointments

10m Emma Smith, Managing Editor