This is Allens
Kirsty Prinsloo
Kirsty is a partner in our Disputes & Investigations practice and specialises in restructuring and corporate insolvency.
When I was sitting my HSC, I found myself at a crossroads between two distinct career paths: economics and law or exercise science and nutrition. A career fair, where I learned that the exercise science degree may require me to work with cadavers, made my choice clear and I haven't looked back.
Working in restructuring and insolvency, I often find myself at the intersection of strategy and technical legal issues, particularly in times of crisis. I know that clients value our technical expertise, problem-solving skills, commercial thinking, and our ability to partner with them in 'make or break' moments. But they often tell me that it's our proactivity in including subject matter experts from across the firm and providing clients with a genuine 'whole of firm' offering that really sets us apart. Being with our clients in those moments of crisis and working closely with the next generation of lawyers to pass on what we've learned is enormously fulfilling.
The journey to partnership has been rewarding and energising. I am excited to be part of a cohort of new partners that reflects the many different pathways to partnership. There is no linear trajectory to success; Allens embraces different people and experiences and we understand how enriching that is for our clients, our people and our culture.
Kirsty's top three restructuring and insolvency trends to watch this year
The environment: Rate rises will see insolvencies increase
There has been plenty of discussion around the lack of formal insolvency during the COVID-19 pandemic. This was largely due to government stimulus and the temporary changes to the insolvent trading laws. While the economy was able to avoid an avalanche of corporate collapses during the pandemic, with the withdrawal of those measures and a higher interest rate environment, we are seeing a steady increase in insolvencies. The industries we expect to see hit hardest include construction, aged care, financial services and retail.
The players: Traditional lenders stepping up, alternative capital providers stepping in
Traditional lenders have a range of options when a borrower experiences financial distress. As an alternative to enforcing their security, private capital and funds are looking for opportunities to invest in the current market through buy outs of lender exposure and recapitalising companies or pursuing debt for equity transactions. Given the current economic climate, we expect to see the traditional lenders taking a more active role in managing their exposures and an increased presence of alternative capital providers looking for more flexible and novel methods to invest in special situations.
The game: Changing risk appetite to increase restructuring
With players in the market who are well capitalised and willing to take on risk, we expect to see strong growth in the restructuring space as opposed to the traditional route of payment default leading to a formal appointment. We anticipate a continued uptick in loan-to-own strategies, schemes of arrangements and deeds of company arrangements.
