The Breakdown of Trust Between Banks and Business

All we need is an expansion of our credit lines, then we will be out of our temporary earnings and liquidity problems in no time. - It is amazing how frequently this very sentence is uttered in the course of negotiations between the executive management of an embattled company and its financial partners. Many executives apparently consider this simple formula a patent remedy in crisis management. However, frequently the required liquidity can no longer be obtained solely on the basis of such an...

The Current Status of the Distressed Debt Market in Germany

How do banks rate the status quo on the German distressed debt market To get answers to this important question, we queried banks on their assessment of the current market volume, the expected changes in market volume, as well as the transaction volume they expect to see in the next few years. Fig. 4 Estimated nominal value of distressed debt in Germany 2005 Fig. 4 Estimated nominal value of distressed debt in Germany 2005 The distressed debt market volume in Germany is estimated to total...

New Trends in the Due Diligence Process

Almost every single corporate acquisition involves the performance of due diligence. Originally this meant that balance sheets were reviewed, the entrepreneurial and financial situation of the business was analyzed, and all legal and tax relevant risks were assessed. However, the due diligence process has become increasingly complex. Just a decade ago, due diligence in a sizeable company took just a few weeks and required a small number of internal and external experts. Today a multitude of...

Distressed Capital The Future of Corporate Financing in Germany

Over the past five years, an increasing number of established companies have been facing growing challenges Rising leverages, decreasing equity ratios and increasing financing costs due to deteriorating credit ratings combined with additional financing needs for restructuring and growth investments, as well as internationalization pressure. Companies are not only facing strategic crises, but also profit and liquidity crises. These challenges represent a dilemma for these companies. They need...

Foreword

Technological progress and globalization have completely changed the overall conditions and rules of entrepreneurial engagement. The speed of this modern high performance economy has accelerated, competition is fiercer than ever, and the battles are no longer fought in the domestic or intra-European arena, but on a global level. To keep up with their rivals and increase their productivity, businesses must be able to efficiently manage their processes and structures. However, strategies and...