1. Post-Covid, we have a cocktail of macro headwinds, war between Russia and Ukraine, rising energy prices and an upcoming recession. How do you think the restructuring space will be affected?

The convergence of these factors combined with the necessity of central banks to bring inflation under control will see invariably see default rates rise in Q4 2022 and 2023 across a range of sectors leading to an increase in distressed activity. The number of companies requiring restructuring will correspondingly increase.

2. What secondary effects will see see from the Russia/Ukraine conflict?

The two which are most pressing from a global humanitarian perspective are food (grain in particular) and energy. The first effect will be poverty across parts of the developing world which rely on wheat as a staple due to shortages and high inflation. One hope to avert this will be the reopening of the Black Sea grain corridor but only time will tell if it is too late for 2023. Then we have energy. We have not started to see the impact of fuel inflation related poverty, and as we head into a northern hemisphere winter we are going to see big issues arise. This obviously impacts businesses materially as well. There are a number of other effects but these are the most pressing.

3. K&E is reportedly representing a number of Adler Real Estate bondholders. Are you expecting more distress from the German real estate market?

Not thematically. Rising rates will put some borrowers under pressure but our analysis shows it to be a case-by-case basis underpinned by credit, asset quality and capital structure manoeuvrability.

4. Have you seen an increase in distressed activity over recent months?

Yes in Europe there has been as secondary prices moved into stressed and distressed territory, and macro pressures start to bite.  Lots of activity on the buy-side, lots on the special situations side, and an increase on the debtor side. In the US there has been a very marked pickup in activity across the board.

5. Looking back, what were the most rewarding and/or challenging types of deal you’ve worked on during your 16 years at K&E?

There are two types of matters which are more rewarding than others. The first where against the odds we helped rescue a company and saved jobs. If you have ever had to stand in front of a workforce and tell them they no longer have their jobs you will know how life altering it is. So when we as practitioners use a U.K. Restructuring Plan, or Safeguard, or Homolgacíon, or Dutch scheme, or Chapter 11 to get a deal through, it can and sometimes does have a material impact. The second type is where we have creatively used a process to effect a deal. These are the most rewarding to me.

6. What impact (if any) have recent changes in UK and Europe restructuring processes had on deals you are working on?

The advent of all the new restructuring processes across Europe has brought greater optionality when evaluating potential restructuring mechanisms in our deals. However, English restructuring processes remain most common in large European deals (given the prevalence of English law debt, the "rule in Gibbs", and predictability of outcome, among other reasons). As ever, questions of international recognition have to be approached carefully - even more so post-Brexit.

7.  What restructuring techniques are in vogue at the moment? Are there any recent deals which have set important precedents?

We always approach restructuring techniques on a case-by-case basis.  The new UK restructuring plan has proved very effective - especially given important precedents regarding cross-class cram-down such as Deep Ocean, Virgin Active and Hurricane Energy, and the ability to disenfranchise out-of-the-money classes altogether (as in Smile Telecoms). Use of schemes of arrangement continues where appropriate (principally, where there is no prospective dissenting class) - though we have also seen a number of consensual enforcements utilised instead.

8. What do you like about working at Kirkland & Ellis?

I have been here a long time so lots of things! However the items that never cease to impress me are the calibre of lawyer in every group across every office, the dedication to client service, and the truly entrepreneurial attitude across the board.

9. Lastly, a cheeky bonus question from us. What’s your favourite thing about 9fin?

Data is king, and being able to analyse companies in a variety of deep ways using your data and platform is excellent.