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| Well Almost Every Time |
As promised earlier, some thoughts on potential winners and losers from Dana Gas’s “clever
boots” maneuver. Given AA's positive
nature, let’s start this series of posts with the most likely winners.
As with
any restructuring, the most likely winners are the financial and legal advisors
engaged by the obligor and the creditors as well as other firms that may be called upon to provide services, e.g., accounting firms, subject matter experts (here Shari'ah law and "Islamic" financial structuring), etc.
Assuming payment of fees (particularly those owed by the obligor) there
is a financial win for both sets of advisors.
But reputational risks remain
until the restructuring is complete. And sometimes even after.
Did a financial
advisor give bad advice that harmed its client and did news of that harm become
public? Sometimes an advisor makes a
bone-headed demand. The other party’s advisor recognizes the mistake, prudently
keeps silent itself and advises its client to do so. Its client reaps the
benefit.
Did a law firm miss a critical
detail and a legal case went awry? Did
its pen make an unintentional slip in document drafting that resulted in
unintended benefit to the other side? Or
did it miss an intentional attempt by the other party’s legal advisor to “redo”
the termsheet through clever drafting?
As one of AA’s legal eagle friends notes when you’re on the benefit end
you need to have a poker face. When you’re
on the receiving end of mischief intentional or otherwise, you need to have a sharp mind and loud voice.
- DG’s advisors are Houlihan Lokey (financial) and Squire Patton Boggs (legal) as per the Company’s 5 June 2017 press release.
- Creditors have reportedly engaged Moelis (financial) and Weil, Gotshal & Manges (legal) as per Reuters.
At present, advisor
reputational risks are focused on the advisors being tagged whether rightly or
wrongly with DG’s high risk and poorly thought out strategy. More on that point to follow.
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