Solutions

Turnaround and Restructuring

Providing solutions through a team of technical specialists with experience navigating all aspects of turnaround, restructuring, bankruptcy, and emergence.

Market turmoil and macroeconomic pressures present unique challenges that contribute to distress for some companies. These businesses often report actual or potential loss of revenue and face increased financial hardship. Some may even be pushed into bankruptcy or restructuring.

These organizations can expect many questions and challenges, including how to manage their insurance programs. Securing robust coverage that meets the unique needs of a business undergoing bankruptcy or restructuring — at competitive pricing and with appropriate limits and terms and conditions — may be difficult without the help of experienced advisors.

Specialists from Marsh’s dedicated Turnaround and Restructuring Practice, part of our Financial and Professional Liability (FINPRO) Practice, can help you throughout the bankruptcy or restructuring process, serving as your trusted advisor every step of the way. Our team includes senior brokers with an average of 20-plus years of knowledge and experience placing directors and officers (D&O) liability insurance for companies going through bankruptcy and restructuring.

Having helped hundreds of distressed companies, our specialists can effectively guide you through this difficult process, anticipating critical questions and delivering proven solutions to help you protect your corporate and personal assets and achieve peace of mind. Our professional team has experience with all manner of bankruptcy and restructuring transactions, including pre-packaged or pre-negotiated filings, distressed asset sales, and liquidations.

Diagnosing your insurance needs

We help distressed companies in a number of ways, starting with a bankruptcy diagnostic that can be completed as soon as your company exhibits signs of distress. Using the diagnostic, we can review key metrics that can affect how insurers underwrite and price your coverage, including your financial statements, future earnings, cash flow, debt, lender financial covenants, and ability to make future debt/interest payments. We can then advise you on how to secure robust coverage that specifically addresses your restructuring or bankruptcy risks.

Securing personal asset protection through D&O insurance

As the bankruptcy and restructuring process continues, we will review your D&O program. A D&O policy becomes especially meaningful during insolvency, when a company may be unable to indemnify its senior leaders. However, this is also a time of increased risk for D&O insurers, and companies will need to make sure they are presenting their risk effectively.

Engaging other valuable insurance solutions

Beyond D&O coverage, our team of specialists can help you manage a variety of other insurance products designed to address risks for restructuring companies.

Meeting your post-restructuring insurance needs

As your company emerges post–bankruptcy, potentially with a new capital structure, our team can provide a comprehensive analysis of all of your insurance programs to help you determine appropriate coverage and limits.

Resolving complex claims along a continuum

D&O claims can be highly complex, and even more so if related to litigation filed as a result of a corporate bankruptcy. Plaintiffs typically include shareholders, creditors, lenders, bondholders, and employees. Our team of experienced claims advocates can help you avoid protracted disputes and assist you in driving positive claim results for the duration of your runoff policy.

Throughout the claims process, executives who may be preoccupied with bankruptcy proceedings can benefit from the knowledge and experience of our D&O claims advocates.

FAQs

Marsh FINPRO’s Turnaround and Restructuring Practice is a team of technical specialists with experience navigating all aspects of turnaround restructuring, bankruptcy and emergence. We are made up of 17 subject matter experts (SMEs) with experience in all manner of restructurings, who have 20+ years of average experience in financial lines insurance. The practice includes five attorneys with experience in Turnaround and Restructuring transactions and the ability to provide best-in-class advice on navigating through the complicated insurance implications of these transactions.

We help distressed companies in a number of ways, starting with a bankruptcy diagnostic that can be completed as soon as your company exhibits signs of distress. Using the diagnostic, we can review key metrics that can affect how insurers underwrite and price coverage for you, including your financial statements, future earnings, cash flow, debt, lender financial covenants, and ability to make future debt/interest payments. Informed by the results of the diagnostic, we can advise you on how to secure robust coverage that specifically addresses your risks during a restructuring or bankruptcy.

Our team can also provide a comprehensive analysis of all of your insurance programs to help you determine appropriate coverage and limits as the company emerges post–bankruptcy. Typically, a company’s D&O insurance coverage and limit needs will change depending on its post-emergence capital structure.

Beyond D&O coverage, our team of specialists can help you manage a variety of other insurance products designed to address risks for restructuring companies. These include:

Transactional risk insurance solutions to de-risk mergers and acquisitions (M&A) transactions as your company looks to restructure by selling assets.
Policies to address third-party concerns around representations and warranties, litigation liabilities, tax issues, environmental issues, successor liability, or fraudulent conveyance risk.
Coverage to backstop tax opinions or known loss scenarios.
Employment practices liability insurance to protect your company from claims made by employees who are terminated as a result of bankruptcy or restructuring.
Fiduciary liability insurance to protect against risks arising out of underfunded pension plans.
Insurance to quantify known exposures and eliminate the need for contingency trusts. We can help you pursue strategies to unlock excess cash collateral posted to insurers and provide immediate access to funds.

Why Marsh

Marsh’s team of FINPRO specialists has helped hundreds of companies navigate the process, and can help you manage critical risks, answer your key questions, and anticipate questions from underwriters. And with the backing of our 300+ FINPRO colleagues across the US — with deep knowledge of financial and professional policy forms, relationships with all leading insurers, and experience placing coverage for thousands of companies — we can help you build effective insurance programs at competitive pricing.

Technology company

Chapter 11, in and out of court restructuring

Assisted a high-speed internet provider — backed by a prominent financial sponsor — that filed for bankruptcy protection, aiming to sell itself under bankruptcy. The company sought chapter 11 protection in the US Bankruptcy Court in Delaware after having struggled to quickly expand through acquisitions.

Placed new, dedicated limits for the board members prior to the commencement of the bankruptcy proceedings. The Marsh team also negotiated the pre-payment of a 6 year tail, prior to the filing, to become effective upon the court approved sale of assets. In addition to the existing board (as well as counsel to the board), Marsh worked directly with the company’s chief restructuring officer in the design and placement of the financial protection procured.

Retail company

Pre-packaged bankruptcy

Assisted a publicly traded lifestyle brand collective that designs, markets, and sells products in the apparel and accessories categories with D&O insurance needs prior to filing, during the bankruptcy process, and at emergence. This client was able to file a “pre-packaged”’ bankruptcy despite over US$1.5 billion in funded debt. Given the company and outside counsel’s coordination with lenders prior to the filing, our team negotiated favorable pricing with insurers for tail coverage prior to the filing. Our team then redesigned and syndicated a go-forward D&O coverage with focus on private company D&O risk once the reorganization plan approved by the United States Bankruptcy Court for the Southern District of New York. Marsh’s claim advocates were engaged to assist with an insurance recovery stemming from a dispute with unsecured creditors.

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