It is a sad fact of life that as economic cycles turn in volatile markets there will always be winners and loser. What has been surprising in the current UK downturn has been that the pace of insolvency has not been greater and this is largely due to the forbearance of HMRC and the banks,
However we are now seeing continued evidence of the revolution in retailing and that traditional retailers are falling over like West Country skittles and we expect to see 2012 being a year of restructuring as the banks try to recover pennies in the pound from so called Zombie assets.
This will require repackaging amongst businesses, insolvency practitioners, accountants and lawyers with the normal concern about third party creditors getting stuffed along the way.
it is certainly not an area for the unwary and professional advice is needed earlier in the process amongst a small cadre of chosen advisors and even if you are offered participation in a prepack solution you need independent advice on the risks involved but there can be gems to be unearthed.
As these sorts of deals tend to be transactionally orientated many of us could be visiting this form of refinancing for the first time or indeed looking at the investment opportunities beloved of the venture capitalists.
Readers might find this background article a useful introduction to the subject.
Author: Chris Slay
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