At a Glance: Insolvency Law: Pitfalls of Distressed Lending
26 March 2007
Mayer Brown Newsletter
March 2007 - When a company in a distressed situation asks for an extension of its loans or even for new loans, the banks are faced with a dilemma: in the event they deny such a request, the debtor very often files an application to initiate insolvency proceedings. In such case, the loans already granted by the bank, or at least the loans which are not completely secured, will likely not be repaid entirely.