Successful Debt Restructuring and Bespoke Settlement Agreement for Corporate Client
We are pleased to share details of another recent success by Senior Associate Marco Difato of our corporate team, who provided strategic advice and negotiation support to a longstanding client in the resolution of a complex financing arrangement.
Our client, a well-established company in its sector, had entered into a funding arrangement with a lender some years ago. The structure involved both a loan facility and an equity investment, with the lender holding preference shares alongside secured rights over the company.
In recent months, circumstances arose that necessitated a significant restructuring of the arrangement. While not an outright default situation, the client required a commercially viable pathway to exit from the debt obligation and to regularise the lender’s equity position.
Our role involved:
Negotiated the wording of the settlement agreement with the lender’s solicitors;
Structuring the conversion of the lender’s preference shares into ordinary shares; and
Coordinating the removal of the lender’s security over the company’s assets.
The matter was particularly complex due to the dual nature of the original arrangements. The settlement agreement had to address both the loan documentation and the investment agreement under which the lender had received its equity interest. Certain provisions of the investment agreement continued to apply following the restructuring, while others were waived entirely. This required careful drafting to ensure that the client’s ongoing obligations were clear, limited, and commercially acceptable.
The negotiations were protracted, reflecting the intricacies of disentangling intertwined debt and equity arrangements while safeguarding our client’s operational freedom and future investment prospects. Nonetheless, the outcome achieved met all of our client’s objectives: the debt was extinguished, the equity position regularised, and the company’s security was released.
Our client expressed their satisfaction with both the process and the result, recognising the value of our commercially minded approach and our ability to navigate the technical and strategic elements of the transaction.
This case highlights the importance of bespoke legal advice in corporate debt restructuring scenarios, particularly where multiple financing instruments are involved. Our team, under Marco’s leadership, remains committed to delivering practical, creative, and client-focused solutions to complex corporate challenges.
If your business is facing a similar challenge—whether it’s a debt restructuring, settlement agreement, or complex shareholder arrangement—our experienced corporate lawyers at Adam Benedict can help. Contact us today to discuss your options and secure a tailored, commercially driven outcome.
