For distressed firms with both bank and public debt outstanding, banks never make concessions unless public debtholders also restructure their claims.

Question

Quizplus · Accepted Answer

Banks are reluctant to make concessions to distressed firms unless public debtholders also restructure their claims because they fear that doing so will weaken their own position relative to the public debtholders.

For Distressed Firms with Both Bank and Public Debt Outstanding