Avaya Restructuring Support Agreement


Opportunistic behaviour can occur on all sides in restructuring negotiations. Insolvency creates opportunities for creditors (and the debtor) to use transactional leverage to influence the allocation of scarce assets: secured creditors may close; banks can account; Key suppliers may threaten to stop delivery; Landlords may threaten to be evicted; unsecured creditors can receive judgments and begin to seize assets; and buyers may try to use a depressed note to buy the company at a low price. To the extent that the debtor has value as a sued business, individual creditors may have the power to assert their value by threatening to impose liquidation. In addition, fully secured creditors may prefer a rapid realisation of their assets, as they do not benefit from the added value of the business. “This is the beginning of an important new chapter for Avaya,” said Jim Chirico, President and CEO of Avaya. . . .

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