In our first article in this series, we looked at the mystery of why apparently solvent companies end up heavily devalued and paying almost nothing to their unsecured creditors if they have the misfortune to file for insolvency. Now we dive into more detail into the conflict between book values and real life realisations in an insolvency context, starting with a
One of the great commercial puzzles is why the unsecured creditors of an apparently healthy business end up only recovering pennies in the pound on their debts and the shareholders get wiped out, if the company files for insolvency. Published accounts The bedrock of credit and investment risk management are the annual accounts published by a company. In days gone
Those who run and manage businesses are familiar with the two traditional sources of funding. They understand balance sheet finance, whether it is debt from lenders or equity from shareholders. They also live with the vagaries of the liquidity (positive or more usually negative) that is generated from trading and operations, in the form of the difference between what they
What do the collapse of a major cryptocurrency exchange, Britain’s allegedly biggest-ever personal insolvency and the devastation of one of Russia’s major gold mining businesses by post-Ukraine invasion sanctions have in common? The answer is that in each of these very different international insolvency cases, the subsequent rescue bid has involved Opus Partner, Allister Manson, who was recently named the
The Coronavirus Business Interruption Loan Scheme (CBILS Scheme) One of the three main pandemic loan mechanisms, the CBIL Scheme, ran from March 2020 to March 2021. Lenders advanced a total of £26.4bn to 109,877 borrowers at an average loan value of £240,000. The maximum loan was £5m and the government provided a guarantee of 80% of the debt. The lender
The government’s cut in support for businesses on their energy costs announced in the new Energy Bills Discount Scheme was expected, but the scale of it has left some high energy use sectors gasping. Overall, the new arrangements mean an 85% cut in the discounts for the business community from £18bn in six months under the old scheme to only
