Gordian Partners Henry Owsley and Peter Kaufman Quoted in, “Restructuring Pros Reflect on 2021,” Turnarounds & Workouts – News for People Tracking Distressed Businesses
December 2021, Volume 35, Issue 12
Turnarounds & Workouts asked restructuring experts to share their views on how the industry turned out in 2021.
Total Commercial Filings (Chapters 11, 7, 13 and 15):
2021 (through November) = 20,673
2020 = 32,517
2019 = 39,050
2018 = 38,044
2017 = 38,536
2016 = 38,283
2015 = 30,190
2014 = 34,818
2013 = 44,356
2012 = 58,058
T&W provides original content contributions not published elsewhere. Written by Christopher Patalinghug
RELATED CONTENT: Restructuring With Debt Spring-Backs and Spring-Downs Part 2, Co-Authored by Gordian Partners | The Deal
Questions and Answers on 2021 Restructuring Trends include:
- T&W: Overall what did the restructuring activity look like this year?
- Owsley & Kaufman: “The pace of the activity slowed from the energy-driven cases in 2020. The principal factors causing the change were a flood of liquidity and a large uptick in oil prices.”
- T&W: What sectors saw the most restructuring activity? Why?
- Owsley & Kaufman: “Oil & gas. (although down from the year before), due to regulatory issues. Senior living due to lower census and higher operating costs. Travel, etc. due to the effects of COVID.
- T&W: This year, the economy was beset with supply chain disruptions, extreme weather events and civil unrest in some states, among other challenges. How did these impact restructuring activity this year?
- Owsley & Kaufman: Relatively little.
- T&W: SPAC Analytics says 63% of US IPOs this year to date were SPACs (566 of 901), which collectively raised $152 billion. The number of SPACs is more than double 2020’s, with 248 SPAC IPOs, raising $83 billion. What impact, if any, did the SPAC craze have in the corporate restructuring industry?
- Owsley & Kaufman: This is just one more way liquidity entered the system. Risky debt is being refinanced or bought out, rather than being restructured.
- T&W: Were there any other trends in 2021?
- Owsley and Kaufman: We are likely getting closer to a market top across the board, leading to refinancing challenges ahead.
- T&W: Was there any court decision, case or transaction this year that might set off a trend of may influence how restructurings are done in the future? Or, were there cases that took an unexpected or surprising turn? How?
- Owsley and Kaufman: Liability minimization (Texas Two-Step, significant releases, etc.) will probably accelerate until the government acts.
- T&W: What do you consider as your challenge in the past year?
- Owsley & Kaufman: Managing through a remote environment, training junior professionals remotely, obtaining business in a very depressed default rate environment.
- T&W: You (or your firm’s) greatest success?
- Owsley & Kaufman: Being able to look forward to 2022.
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