Gordian Group CEO Henry Owsley provides his thoughts on the current economic situation facing companies in the United States. Joining him in this Perspectives Discussion Series are Rick Mikels, Partner at Law Firm, Pachulski Stang Ziehl and Jones LLP and Ben Procter, Senior Partner at Private Investment Firm, The Watermill Group.
Key topics covered in this discussion include:
- Are distressed companies facing the same challenges they did today vs. the 2008-2009 financial crisis?
- What effect has and could government stimulus and intervention have for the distressed market?
- The first wave of defaults have come from retail and energy sectors. Will there be a next wave and if so what sectors might be affected?
- Will the existing insolvency laws and practices work for today’s distressed companies being impacted by COVID-19?
- Did old equity fare well in the last recession and can they now?
Listen now! Use the timestamp below to replay parts of the discusssion.
00:56 | Once again, we find ourselves in interesting and discomforting times. In the aftermath of the previous financial crisis of 2008-2009, the central banks intervened in the markets for years through QE and other measures. How did this affect the distressed company environment, and are there lessons to be learned?
06:57 | The central banks and other governmental agencies are intervening again in trying to cure the economy of COVID. What impacts have these actions had on the distressed markets to date? What are some of the risks going forward on this front?
13:15 | The crisis of a decade ago was caused by the popping of the real estate securitization bubble. This one seems to be more of a global business interruption, coupled with the wholesale wipeout of various businesses and jobs and with the potential decoupling of worldwide supply networks. How does that difference factor into what lies ahead for the distressed sector?
18:07 | The energy and retail sectors have already been devastated. What industries do you see coming in any next wave of defaults?
23:33 | Will the “rules of the game” in the insolvency practice be sufficient to allow for the deleveraging of America (and the world). Is that even necessary? Did it work last time and what is different this time?
29:41 | Did the last recession provide an opportunity for old equity to preserve value? Is anything different this time?
Thank you to Rick Mikels, Partner at Law Firm, Pachulski Stang Ziehl and Jones LLP and Ben Procter, Senior Partner at Private Investment Firm, The Watermill Group for their contribution to this discussion. If you’d like a transcript of this discussion or would like to be a guest in an upcoming episode please contact Leslie Glassman.