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A US Financial institution sought assistance in evaluating an export factoring line for a US company in Chapter 11 based on sales of product manufactured in a German subsidiary. BM&T evaluated the structure of the European group, the viability of the German operation, and together with legal counsel, the risk of statutory insolvency in the German company. Based on this assessment the USA institution was able to make an informed assessment of risk associated with the transaction and declined to participate. Soon after, the subsidiary was forced to file for insolvency.
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Notes, insights and reflections from Matthew, one of our directors and turnaround experts, as he works with companies during Lockdown.