Reducing a Customer’s Accounts Receivable in the Zone of Insolvency

By: David H. Conaway, Shumaker, Loop & Kendrick, LLP Reuters, Bloomberg and Debtwire are all reporting negative financial information about your customer:

"Bond ratings are down-graded, bond prices are falling, a likely “restructuring” to address the bond debt, bondholders form an “ad hoc” committee to negotiate with the customer, the bondholders retain financial advisors and counsel … as does the customer."

You know what’s coming, a Chapter 11 filing, but the customer will not confirm that. In fact, the customer denies the “rumors”, fearful of triggering defaults and losing credit terms provided by suppliers.