In these difficult economic times, companies seeking additional liquidity may turn to alternative sources of financing. Companies with assets that can be monetized (e.g., accounts receivable, intellectual property, real estate, equipment, etc.) may discover a number of options available to them. In particular, accounts receivable financing may be an attractive way for certain companies to obtain working capital relatively quickly.

In many corporate Chapter 11 cases, unsecured creditors of the debtor have few, if any, assets they may use to satisfy their claims. A debtor’s hard assets, cash and cash equivalents are almost always subject to liens in favor of secured creditors, leaving no tangible assets for unsecured creditors. If unsecured creditors are to receive any value in return for their claims, this value usually must be realized from the debtor’s causes of action.

The oil and gas industry is in the midst of a transition, with prices falling as supply outpaces current demand. With global economic weakness and growing competition from alternative energy sources, the expectation is for continued headwinds. Low prices have caused numerous producers to default on their indebtedness and many to seek financial restructuring, including filing for bankruptcy protection.