The new Company Stabilisation and Restructuring Act (StaRUG for short) entered into force on January 1, 2021. It is based on a European directive on the introduction of a pre-insolvency restructuring procedure, which was adopted in June 2019.

The intention is to facilitate early restructuring of companies and in any case before insolvency occurs. The idea is to avoid the disadvantages of insolvency - a possible loss of reputation and high costs for the affected company, disruption to trade and to safeguard employment.

To say a lot happened in 2020 doesn’t begin to capture what the year brought. In the economy, this included a significant increase in Chapter 11 filings for larger businesses from filings in 2019, particularly in retail. And for asset-based lenders it included a significant shift in their role in the larger bankruptcies. Asset-based lenders faced real challenges how to best protect their position and enhance the likelihood of a successful outcome. Confronted with a landscape that requires a new map to navigate, we look at what happened, how it happened and, most importantly, what should (or can) the asset-based lender do about it?

Otterbourg P.C. announced today that James M. Cretella has been named Chair of the firm’s Alternative and Specialty Finance Practice Group.

“His leadership qualities are equally impressive, and we are pleased that he will chair this expanding practice area.”

A member of the firm’s Finance Department, Mr. Cretella represents lenders, factoring companies and prominent financial institutions, as well as borrowers, in a variety of lending, factoring and corporate transactions.

Andrew (Andy) Cerussi has joined Tiger Financial, LLC as a Managing Director. Tiger Financial is an affiliate of Tiger Capital Group, the asset valuation and financial services firm.

From his base in Tiger's Boston office, the 20-year veteran of the asset-based lending and financial services industries will focus on identifying both secured debt financing and equity capital opportunities.

The COVID-19 pandemic continues to wreak havoc across the country. Millions of small businesses are struggling, with many having closed and others on the verge of shuttering.

A recent Harvard Business School survey of 5,800 businesses reveals the median business with $10,000 or more in monthly expenses usually lacks sufficient ready cash to cover two weeks of spending.

Not surprisingly, small business defaults are up considerably. From roughly two percent of small business debt last year, they now consist of 2.7 percent of small business debt. The future does not look bright. By 2021, default rates may rise to as high as five to six percent, according to models.  

Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moves toward a deal to sell its operating business to Apollo Global Management, according to people familiar with the matter.

Also Wednesday, in a dramatic ratcheting up of Greensill’s problems, Germany’s top financial regulator BaFin referred matters related to the firm’s banking unit, Greensill Bank AG, to criminal prosecutors, according to a spokesman for the Bremen prosecutors office. Details of the complaint sent to prosecutors couldn’t be learned; it is up to the prosecutors to decide whether to file any charges.

SFNet will be providing original content shortly on the unfolding Greensill Capital story. Continue to check TSL Express for updates.

The Federal Paycheck Protection Program loan funds did buy many struggling businesses time to weather the proverbial economic storm. Plus, secured lenders, not surprisingly, found it much more advantageous to work with borrowers and extend liquidity than deal with a bankrupt business. The idea was simply that the pandemic couldn’t last forever and that the economy, as it is now, does appear to be on the mend.

Asset-based lenders were aware of the problems going into the pandemic. Not surprisingly, brick and mortar retailers, already facing significant financial stress before the shutdown, did take the brunt of the pandemic and many were forced to shutter stores, says Dan Karas, executive vice president of Allied Affiliated Funding, a division of Axiom Bank, N.A. Many large retailer liquidations dominated 2020, including J.C. Penney and Pier 1. The silver lining for lenders, as it turns out, is that liquidations were generally not the order of the day for most businesses, he adds. According to data from Epiq, commercial Chapter 11 filings grew year-over-year, up 29% in 2020 compared to 2019.

The acquisitive Canadian music rights and services company – formerly known as Olé Entertainment – has announced that it has secured a new revolving credit facility of USD $400 million, plus a USD $150 million accordion. 

Truist Securities served as Left Lead Arranger of Anthem Entertainment’s new $400 million credit facility. Fifth Third Bank acted as Joint Lead Arranger, Union Bank acted as Syndication Agent and Regions Bank acted as Documentation Agent.

Other banks in the facility include Bank of America, Bank Hapoalim, CIT Bank, First Horizon Bank, HSBC Bank, Pacific Premier Bank, Pinnacle Bank and Scotiabank.

Axiom Bank, N.A., a Maitland-based, leading community bank, recently expanded its factoring and asset-based lending division with the hiring of Mark J. Simshauser as SVP of Allied Affiliated Funding.

Based on Long Island, NY, Simshauser will be responsible for expanding Allied and Axiom’s existing commercial portfolio by working with business owners and centers of influence throughout the Northeast to find solutions that meet their individual financial needs. 

Capstone Headwaters (“Capstone”), a leading middle market investment banking firm, announced it has completed the acquisition of Amherst Consulting LLC (“Amherst”) as part of a continued plan to grow the company’s Financial Advisory Services (“FAS”) group.

The announcement marks the latest development in a multiphase strategy Capstone unveiled this past December with the addition of several new FAS professionals based in various locations, including Denver and Canada. The newly acquired Amherst team will be led by Sheldon Stone and Scott Eisenberg who are joining Capstone’s FAS Group as Managing Directors and will continue to be based in Michigan.

Otterbourg P.C. announced today that Valerie S. Mason and Nneoma A. Maduike have been named Co-Chairs of the firm’s Lender Finance Practice Group.

Otterbourg’s experienced Lender Finance team advises and represents the largest US and global institutional lenders and regional banks, as lenders and mature lenders, sponsor supported companies, and strategics, ranging from start-ups to mature traditional lenders and funds, merchant cash advance companies, asset-based lenders, factors and fintech lenders, as borrowers, in “lender to lender” secured revolving credit and term loan facilities.

Screen shots of the various First Place Teams from the Go Game festivities held on October 27. Attendees had a great time competing in trivia and lip syncing competitions.

This is a new feature providing advice from WISF members to young professionals on a specific topic.  We need your input.  If you have a question you would like to see answered in this column, please submit to Michele Ocejo at mocejo@sfnet.com.

Dear WISF,

“Once you are established within a job and/or have already experienced some degree of internal growth, what additional steps would you recommend to continue career growth and development? Early in the career, there are multiple paths and opportunities an early career individual can pursue.  However, once in the mid-level, the continued growth opportunities may not be as bountiful.”

The COVID-19 pandemic has had a devastating effect on the global economy and led to paralyzed supply chains, export restrictions and closed borders. This shock brought about several significant changes to a number of industries and accelerated existing trends such as automation, digitalization, supplier base diversification and supply chain operational efficiencies. Cross-border trade is at the center of everyone’s attention.