Steven Cooperman and Brian Forman Quoted in Middle Market Growth on Restructuring Options for Struggling Companies

Steven Cooperman and Brian Forman were quoted in a Middle Market Growth article entitled “Struggling Companies and Lenders Hit the Negotiation Table.” The article discussed that with rising interest rates and tough economic conditions, businesses are turning to lenders for help in avoiding bankruptcy court. As a result, restructuring, refinancing and the use of emergency financing are all on the rise.  

Brian, chair of Morrison Cohen’s Investment Funds & Advisers Practice, explained that for privately held companies, there has been a rise in single-asset vehicles housing performing assets that sponsors may not want to sell into a challenging market, as well as a rise in net asset value lines, which GPs can use to distribute cash back to investors if they haven’t exited assets or paid distributions.

“We’re seeing sponsors consider all of the options before them right now,” Brian said. “Some investors are still dealing with the denominator effect and would like to see some cash back. That can be difficult when exits begin to slow.”

Steve, chair and co-managing partner in Morrison Cohen’s Corporate Practice, noted that for managers looking to extend the life cycle of a fund without resorting to either of these options, the “pathway is less clear.” He said, “When the manager finds out that they might not get a management fee during that period or there will be a lot of negotiations with investors to approve the extension, they may not want to go that route.”

Read the article here.