With Hertz emerging from a bankruptcy with a positive result for shareholders, we are reminded of the interplay between the equity markets and the bankruptcy alternative.

Some firms facing financial challenges during the pandemic were able to avoid a bankruptcy filing altogether because of their ability to raise the necessary funds through an equity offering. Hertz provides an example of a situation where the bankruptcy filing instead of wiping out the equity enhanced value.

In April 2019, the Institutional Limited Partners Association (“ILPA”) released a set of considerations for Limited Partners and General Partners with respect to General Partner-led secondary fund restructurings (the “ILPA Memo”). The ILPA Memo can be viewed here.