These troubled economic times present numerous concerns to the ongoing business. However, the dreaded "workout" scenario that arises when a corporation breaches its debt covenants should not be so feared. This Practitioner's Guide will address the workout scenario and provide insight on how to negotiate with a lender and how to address the most common negotiating points in a workout with particular focus on the perspective of sponsors and other significant investors. Part I will discuss how a workout scenario arises and the positions and goals of the respective parties involved-the borrower, the lender and the sponsor. Part II lays out in detail the negotiation process and the relative points of leverage typically involved in a workout. This Practitioner's Guide provides practical suggestions to increase the likelihood of successfully navigating a workout to the mutual benefit of all parties involved.
Christopher W. Kirkham and Jennifer M. Taylor,
Working through a Workout: A Practitioner's Guide from the Perspective of Private Equity Sponsors, Venture Capital Funds and Other Significant Equity Investors,
5 Hastings Bus. L.J. 355
Available at: https://repository.uchastings.edu/hastings_business_law_journal/vol5/iss2/4