We were approached by a company to assist with its restructuring. Our client’s biggest problem was that its largest unsecured creditor was also its main supplier. Approximately 80% of the client’s business depended on the products supplied by this supplier. This would not be a problem if the client and the supplier had an ongoing agreement to continue to supply, but there was no such agreement. The supplier could cut our client off at any time and had no legal obligation to continue to accept our client’s business.
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