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14 Defaults and Workouts: Restructuring Project Financings

Nick Angel, Kate Colman

From: International Project Finance: Law and Practice (2nd Edition)

Edited By: John Dewar

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved.date: 01 June 2023

Credit risk — Security interest — Types of funds

This chapter considers issues relating to the restructuring of project finance companies experiencing financial difficulties. Restructurings may take many forms, but in all cases there will be a number of protagonists with often competing interests: the project company itself, its directors, its sponsors, its creditors, and, especially in a project finance context, key commercial parties or governments connected to the project. This chapter considers the motivations and legal rights and obligations of each of these protagonists, including the heightened duties of directors as a company’s financial situation deteriorates. It also considers the various stages of restructuring—from default through to enforcement or implementation of a consensual restructuring transaction—and examines some of the options available which allow companies to reorganize or reschedule liabilities and continue as a going concern.

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