Switch Bankers Once They Default, For Fear Of Getting Their

The desired outcome of its debt restructuring and recapitalization was to continue to receive credit from companies. After negotiations with its bankers, Harnischfeger was able to convince them to restructure its debt obligations into three year terms.

“In the United States, foreclosures were up 81% in 2008 and up 225% from 206”, which equals out to 19 per 1,000 households (CBS News, 2008). Due to there was a huge increase in foreclosures, instead of housing prices increasing; the houses values decreased in value very quickly and resulted in more foreclosures. A $300 thousand dollar mortgages was now only worth $75 thousand dollars. So all the mortgages that was in the investment banker CDO, now are worthless, and no one wants’ to take the CDO, and now the CDO is acting like a bomb (Roney, 2007). The investment banker is now panicking because he borrowed millions of dollars to buy the mortgage, and now he cannot get rid of it; however he is not the only one. Thousands of investment bankers throughout the world have CDO’s on their hand (Bailed out banks, 2010). In result the world’s financial system has become frozen, and everyone starts going bankrupt. As a result of the failure, the United States government rolls out a new program called Troubled Asset Relief Program (TARP) to prevent another bank failure.

– Calculate and account for Restructuring Provisions – Define Contingent Assets & Liabilities and apply relevant measurement and recognition rules – Apply IAS 37 Disclosure Requirements

Is corporate reorganization an available option? If so, how should it be structured? What issues would be associated with this alternative?

The matter was presented to the Administrative Appeals Tribunal (AAT) and AAT has different views on this matter and AAT considered the historical Cases and

One appreciates the recommendation of providing information on restructuring debt to help the company combat its recent financial troubles. Even though the company is in the process of reorganizing one believes this information will help a company in reporting the restructuring of debt. One will provide information on the requirements of reporting debt on bonds, notes, and capital leases. In performing this one will also provide the journal entries one would need to record to restructure the

This arrangement is known as a trouble debt restructuring. According to FASB ASC 470-60-20, “a restructuring of a debt constitutes a troubled debt restructuring if the creditor for economic or legal reasons related to the debtor's financial difficulties grants a concession to the debtor that it would not otherwise consider.” According to, FASB ASC 470-60-15-9, a troubled debt restructuring may include, but is not necessarily limited to, one or a combination of the following:

Both conditions must be met for the modification of the original debt to be considered a troubled debt Restructuring. According to ASC 40-60-55-7, if the debtor is currently in default of any of its debt than the debtor is experiencing financial difficulty. Private Getaways Co. defaulted on its debt instrument with Bank C that resulted in a cross default on the Original Debt held by Bank A and Bank B. Thus, the first condition is met. However, the second condition is not met due to ASC 40-60-55-10 stating, “A creditor is

(b) Establish the rules of reorganization for firms with projected cash flows that eventually will be sufficient to meet debt payments.

(b) Establish the rules of reorganization for firms with projected cash flows that eventually will be sufficient to meet debt payments.

a decrease in assets. A default rate higher than the historic rate would adversely affect the

a fair and equitable fashion. Once the assets have been allocated, the debtor receives a discharge

(Submitted as a partial fulfilment for the course requirement of Legal Method & Moot Court)

The facts are as Bansal Forgings Ltd took loan from the UP Financial Corporation and it made default in payment of instalment of the same. The Corporation proceeded against the Company under Sec 29 of the UP Financial Corporation Act. The Company filed a civil suit against the corporation and it had also filed an application for grant of temporary injunction. Counsel for the corporation suo motu put appearance in the matter before trial court and prayed for time for filing of reply. The learned trial Court passed an order on the said date and this order was as follows:

FASB Accounting Standards Codification (ASC) 470- 60 [Troubled Debt Restructurings by Debtors] provides guidance on determining whether or not Resort Co. restructuring of its original debt represents a troubled debt restructuring. To start, ASC 470-60-15-01 determines that this section applies to the private company Resort Co.