"Credit Crisis: As Borrowing Troubles Persist, General Counsel Involvement Grows" (Counsel to Counsel)October 7, 2009
SULLIVAN & CROMWELL LLP Vice Chairman Joseph Shenker was featured in the Counsel to Counsel article, "Credit Crisis: As Borrowing Troubles Persist, General Counsel Involvement Grows." The article discussed the financial crisis and the increased role of in-house counsel in companies' credit management. "Many companies aren't certain where to turn for financing," Shenker said. "In every cycle of this kind, we've seen a combination of bankruptcies and conversion of debt to equity on a forced basis; out-of-court restructurings; and capital market restructurings, where you repay your debt by raising capital." He also noted what lawyers and companies should pay attention to going forward. "Lawyers will need to understand the many different layers of debt and equity and how they interrelate," he said. "Companies need to understand the scheduled maturities first, which obviously is a financial issue. Furthermore, a company needs to understand the covenants, which is a combination of finance and legal, to ensure it is not tripping a covenant early and thereby creating an early maturity," he added.
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