Panel: " That’ s a Wrap: Out of Court Restructurings and Prepack Reorganizations "
Summary by Victoria Boacnin – NextGen Class 2025
Thomas Benes Felsberg – Brazil
Mr. Felsberg emphasized the importance of negotiation in restructuring processes. He argued that formal court proceedings are often unnecessary, as agreements can frequently be reached with a small number of key creditors. In his view, restructuring is fundamentally about " counting votes " and finding solutions without escalating to legal conflict. He asserted that very few cases justify filing in court when consensual alternatives exist.
Later, he also highlighted the significant role of cultural factors in restructuring. Even if legal frameworks are similar, outcomes may differ across jurisdictions due to cultural variations in
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negotiation styles and stakeholder behavior. Mylène Boché-Robinet – France Mrs. Boché-Robinet described the French restructuring regime as strongly debtor-friendly, with a longstanding emphasis on preserving businesses and employment over enforcing creditor rights. Since the 1980s, France has had a legal infrastructure supporting early and preventive restructuring efforts. She detailed two amicable procedures— mandat ad hoc and conciliation— which are highly consensual, confidential, and successful in approximately 80 % of cases.
These procedures involve minimal court intervention, mainly limited to the appointment of an independent mediator. Once an agreement is reached, court approval may follow, but this does not impose terms on dissenting
creditors— it merely validates the deal and grants participating creditors preferential treatment in subsequent insolvency proceedings. She also discussed the French version of a prepack, where conciliation is followed by an accelerated safeguard to formally approve pre-negotiated agreements. William Q. Derrough – United States Mr. Derrough provided a historical overview of restructuring practices in the U. S., noting an initial preference for out-of-court liability management— particularly bond exchanges— as an alternative to Chapter 11 filings. These strategies allowed issuers to restructure debt when majority consent under bond indentures was unattainable. However, over time, particularly during the COVID-19 crisis, Chapter 11 gained prominence again due to the prohibitively high cost of bank financing and increasing familiarity of funds with complex exchanges.
He referenced the 2015 innovation by Moelis involving asset“ drop-downs” and emphasized that modern liability management often leverages voting mechanics within bond indentures to restructure debt. Mr. Derrough acknowledged concerns raised about " lender-on-lender violence," stating that while some deals may benefit exclusive participants, Moelis does not engage in such practices. He also stressed that Chapter 11 remains extremely costly and is therefore used only when absolutely necessary. Edward Middleton – Hong Kong Mr. Middleton opened by stating that prepackaged reorganizations( prepacks) are virtually nonexistent in Hong Kong. He noted greater interest in these mechanisms in Singapore and mainland China, although uptake remains limited. Singapore, he explained,
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