The Globe and Mail quotes Toronto Lawyer Stuart Brotman in an article about companies turning to legal strategies to stave off messy bankruptcies.
“The 2008 financial crisis played a part in the preference for many companies to do advance work to control the outcome before entering the formal restructuring process,” says Fasken partner Stuart Brotman, who pointed to the infamous example of Lehman Brothers Holdings Inc., where bankruptcy fees soared to more than US$2-billion.
“Lenders don’t want to fund into a free fall,” he said, adding, “You need enough liquidity as a debtor company to be able to buy yourself prefiling time to have these negotiations. But the objective is to do as much as you can in advance to save money and also lock up support.”
