“The ultimate goal is to decide if there is a viable business to save from a collapsing liquidation,” she notes, adding that all of the potential trigger events lead to the same concern: that the lender is under- collateral or that the value of its collateral could be eroded. “Look-sees helps lenders understand what options are available to them and also which of those options would maximize value for stakeholders. ”
In a recent webinar, A look at look-sees: Understanding Lender kicked off struggling business reviews, Salvi joined Stephanie Wanke, Senior Editor, Insolvency and Restructuring, at Practical Law Canada and Matt McCulloch, Partner and Vice President senior at EY-Parthenon to discuss the context of look-sees, the details of how they work and also explore the legal considerations that go with them.
Recently, a question that has been asked a lot of McCulloch, who works in the practice of turnaround and restructuring strategy with an emphasis on corporate restructurings and insolvencies, is how looks look during COVID. He says he can sum it up in two words: very difficult.
“Most lenders, in my opinion, want to support their clients and debtors if possible and do not seek formal insolvency proceedings unless it is absolutely necessary,” he says, and they are mostly looking for alternatives to formal execution during the environmental pandemic.
One of the primary legal considerations when it comes to look-sees and subsequent proceedings is conflict of interest, and historically there have been concerns about financial advisers acting in double capacity. But Wanke says it may make sense to keep the same person throughout, especially the cost savings as so many companies battle the effects of COVID.