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Splitting the difference: transfer of assets and liabilities in restructurings to reset business profile

9 June 2025 / Author(s): James Greene , Christian Pilkington , Hannah Langley
Issue: June 2025 / Categories: Feature

A business may need to restructure for a variety of reasons; these may be wider industry issues or issues specific to the business certain assets or segments therein. Issue may arise among other reasons due to underperformance rising costs or a diversion of management time. Management may look at a business in a way that differs from creditors with the former particularly interested in future growth and the latter likely looking at shorter term cashflows. In a restructuring context creditors may make the transaction conditional on a refocus of the business as a part of a wider deal to support the business (or a part thereof) in its future operations. Alternatively there may be alignment on the non-core nature of certain assets and as part of a restructuring an agreement to isolate the value of those assets to repay creditors. This...

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