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.’