Bloomberg Quotes Clare Cottle on Creditor-on-Creditor Violence

For its article “Europe Too ‘Polite’ for Firms to Stir Creditor-on-Creditor Chaos,” Bloomberg quoted corporate & finance partner Clare Cottle. The article looks at how the more aggressive strategies that have been adopted in U.S. deals by private equity owners and distressed debt investors are currently running into resistance in Europe.

The article examines how creditor conflicts have become more common in the U.S. as aggressive fund managers seek to exploit weak protections in documentation. With looser terms and the rise of deep-pocketed private credit and special situations funds over the past decade making such deals more likely, Clare noted that “inter-creditor violence is a hot topic.”

Clare concluded that when it comes to creditor conflicts “the potential for these type of transactions exists in a way that it didn’t before… when we had the previous downturn, the documents weren’t like this and there wasn’t a lot of liquidity. Now we might be approaching a downturn, but there is a lot of dry-powder.”