Locke Lord's Stephanie Wickouski Quoted on Bankruptcy and Insolvency Trends in The Burford Quarterly

The Burford Quarterly
February 5, 2021

New York Partner Stephanie Wickouski was quoted throughout an article discussing bankruptcy and insolvency trends in 2020 and the uncertain outlook heading into 2021 as the COVID-19 pandemic continues and government support is withdrawn.

“There are so many variables as to fiscal support—including, obviously, a change in U.S. administration—that it is impossible to predict specific insolvency trends with any certainty right now. A year ago, no one would have predicted $4 trillion in stimulus spending in 2020, and 2021 might be just as unpredictable,” she said.

Wickouski’s remarks, which were given as part of a roundtable discussion, touched on the anticipated duration and intensity of bankruptcy activity in the upcoming cycle.

“Based on the volume of low credit ratings you are seeing, it’s likely that there will be significant restructuring activity during the next two years,” she said. “For some time, I’ve been emphasizing strategies for monetizing illiquid recoveries such as unregistered stock, CVRs, warrants, options and interests in litigation trusts. This topic will be front and center in many restructurings.”

She also discussed the recent evolution of case law related to the safe harbor defense, which has “curtailed creditors’ ability to claw back payments and other transfers made in the context of LBOs and mergers,” and the relationship between the COVID-19 pandemic and legal action related to corporate fraud.

To read the full article, click here.