Many financial services businesses are seeing strong growth on the back of very positive corporate earnings and low interest rates; however, many are becoming vulnerable to increasingly aggressive market regulation. This has led to record-breaking fines imposed on even the largest organisations for previous misdemeanours, which has impacted their profitability.
In addition, since the financial 'crash' of 2008, many financial lending institutions have taken the opportunity to repair balance sheets; however, it is clear that some sections of their portfolios remain exposed and require restructuring and intense management time to get them back on an even keel.
Debts and capital repayments still require careful management and while it is true that many lenders would understandably like to ‘shake the tree’, regulatory constraints have complicated matters and hence more sophisticated solutions and turnaround options are required.
One of the most difficult decisions many lenders face will be whether to call in debts on a particular client and the ability to secure a satisfactory return for their business.
Our experts have a strong track record in implementing business performance improvement programmes, unlocking value and protecting the value of assets. Of course, timing is everything and effective turnaround plans depend almost entirely upon the moment in the cycle at which a distressed business is brought to our attention. We typically carry out a diagnostic business review and prepare a wide variety of proposals to ensure both the bank and its client have some sensible options to consider.
A refinancing option may help banks secure an optimised exit and similarly lenders frequently acknowledge the benefits of our creating an accelerated merger and acquisition prospectus so that suitors interested in bolt-on volume will be attracted to the asset. Our multidisciplinary teams collaborate with the bank and the business to ensure the most satisfactory outcome for both sides, reducing the lender’s exposure in line with their strategy.
With litigation a fact of life for many financial services institutions, we have supported a number of businesses to make their case against, or in defence of, a case. Using technology-driven data analysis tools and expert forensic consulting services, we assist banks and financial institutions in their public disclosure obligations, reviewing relevant documentation and delivering a proportional response.
Related Case Studies
A financial institution was suspected by the United States Senate of being involved in money laundering, drug trafficking, and terrorist financing activities.
The local financial services regulator engaged us as an independent examiner to inspect the Cayman licensee’s compliance with the applicable anti-money laundering and counter financing of terrorism laws and regulations.
The investigation focused on whether the licensee had appropriate and sufficient anti-money laundering policies and procedures and adequate identification procedures.
Various issues arose during the inspection, which we were able to overcome and produce a comprehensive report for the regulator within the deadline imposed.
Pentagon Capital Management
This is a UK based hedge fund manager that manages various funds in Offshore jurisdictions. Following litigation in the US and a highly publicised landmark ruling, following action by the SEC, it suffered an award in excess of $50m which was followed by a Restraining Order being issued by the US Court. We were appointed to the Company in the UK as Joint Administrators and are now managing the company and pursing a highly complex appeal in the US Courts against the earlier ruling.
Securing a Multi-Bank Banking Facility
A leading energy support services provider approached us to assist with arranging its new debt facilities due to their strategic importance and the challenging market environment.
We were able to assist their finance team with developing the right information to deliver to investors and use our detailed knowledge of bank processes to negotiate the right covenants and banking structure. The funding provided committed lines for further organic growth, as well as additional facilities to support strategic acquisitions.
The new debt package saw the company’s existing debt provider joined by four additional banking partners. In the current market, our ability to work flexibly and cost-effectively allowed the company, rather than its banking partners, to drive the financing package and deliver this efficiently.
Carlyle Capital Corporation
This is a hedge fund registered in Guernsey, listed in Amsterdam, but managed from New York & Washington. When it failed in 2008 it had assets and liabilities in excess of $21 billion and its investors had lost all of their $1 billion investment. The liquidation was run out of London working with our offices in Guernsey and Cayman and our alliance members in the US. Following 18 months of intensive investigations we commenced legal action in the US and Guernsey to seek to recover at least $1 billion in funds in order to make good the losses of the creditors and investors. The litigation was extremely complex and hard fought, and is ongoing in both Delaware and Guernsey, with subsidiary actions in New York and Washington DC. We work closely with our principal lawyers in New York, Washington and Hong Kong on this matter, along with UK, Guernsey and Delaware lawyers.