Liquidation Risk
Liquidation risk grows as finance dries up
Source: ft.com (The Financial Times)
The credit crisis has drastically limited the availability of financing that would enable US companies on the verge of insolvency to reorganize under the country's Chapter 11 bankruptcy process.
Lenders face big losses if a company cannot reorganize and liquidates, and debtors face the highest rates to date for DIP financing.
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One can only hope that the new administration in Washington can spur changes in the credit market to restore balance to the lending and borrowing process to bring health back to the real estate industry. It is a unanimous concern that is of nationwide concern; everyone is watching and waiting for some healthy results. With all of that positive desire and karma, it would seem that a turnaround is just around the corner.
This is an interesting link (you do need to sign up for the Financial Times to read the remainder of the article). Not surprisingly, with the drying up of the credit market that business entities are having difficulty making ends meet.
- Owen Ahearn | Flag this comment for review