Specific company know-how can help in devising the best solutions for maximising the value of the firm’s assets – provided that the restructuring process can be insulated from the denial and over-optimism that may have contributed to poor loan underwriting in the first place.
The banks in turn need to be provided with sufficient capital to allow them to fearlessly accept and crystallise the unavoidable loan-losses, sufficient liquidity to be able to provide further financing to set the restructured firm back onto a healthy growth path, and eventually move it out of the limbo of financial distress.