Arik Preis Quoted in Debtwire on Restructuring Trends Past and Future
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Akin Gump financial restructuring partner Arik Preis has been quoted in Debtwire’s “Distressed Briefing 2016 Outlook” as part of a look-back at 2015, and look-ahead to 2016, and some of the biggest trends in restructuring.
Preis noted that during the past four to six months, “we have seen, among other things, the steady fall of commodity prices, including crude oil and natural gas.” These changes, he said, “have led to many situations where companies and their investors made prepetition restructuring agreements only to see that the world had changed by the time they were closer to confirmation.”
Preis continued, “companies simply can’t survive or risk entering Chapter 11 without an exit strategy that can be implemented quickly.” He predicts there may be more of a trend where secured creditors opt to take equity in exchange for “almost completely deleveraged balance sheets.”
Looking ahead at some other trends to watch in the coming year, Preis said the exploration and production industry does not appear to be rebounding any time soon. Additionally, consumer industries “continue to experience declines - - malls will continue to suffer, as will “big boxes” as they continue to lose out to increased online shopping.” He said mining and metals companies will likely also see restructurings in the year to come and, given the increased desire for liquidity, we could see a trend where the appetite to be “restricted” for long periods of time is less than it was in the past.”