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5 Trends to Watch in 2022 Financial Restructuring

  1. Inflation pressure on small margin businesses – Inflation’s rapid rise in 2021, coupled with the national employee shortage has put pressure on small margin businesses in many industries. This shows no signs of abating in 2022 and could become even more damaging to their viability.

  2. More corporate debt restructuring – Businesses began accumulating a lot of debt in 2020, largely due to the COVID-19 pandemic. In 2021, numerous companies converted that debt into equity for lenders and investors - a trend that will likely continue throughout 2022.

  3. Increased merger and acquisition (M&A) activity – As corporate liquidity fuels a glut of cash in the market, expect to see more M&A transactions in numerous industries. This also may lead to a paradigm shift wherein asset values substantially increase.

  4. Continued consolidation in a variety of industries – This trend fits with increased M&A activity, as larger entities seek to benefit from economies of scale and smaller entities seek to grow the products and services they offer.

  5. Pay-forward lending trend grows – With many retailers successfully offering consumers fintech driven buy now/pay later plans rather than channeling purchases through credit cards, there is a rise in consumer debt and a boom in the fintech sector.

About the Authors

Greenberg Traurig, LLP’s internationally recognized Financial Restructuring Practice provides clients with deep insight and knowledge acquired over decades of advisory and litigation experience. The group has a broad and diverse range of experience developing creative and effective strategies to address the highly complex issues that arise in connection with in- and out-of-court reorganizations, restructurings, workouts, liquidations, and distressed acquisitions and sales, both domestically and in cross-border proceedings. With offices in commercial centers across the United States and throughout the world, we utilize our invaluable business network to offer critical advice and counsel to multiple constituencies in numerous insolvency situations.