State of Distressed: Latham’s Sobolewski on Evolving LME Tactics

“’Co-op first, ask questions later’ is down a bit from its peak, though not dead,” observes John Sobolewski, Global Chair of Latham & Watkins’ Liability Management Practice, as he addresses the latest dynamic between debtors and lenders in distressed situations. In this episode, Bloomberg Intelligence analysts Negisa Balluku and Phil Brendel sit down with John to explore the current state of Liability Management Exercises (LMEs) and why stakeholders are ultimately motivated to find negotiated resolutions over value-destroying, multiyear litigation. The conversation unpacks the delicate mechanics of these negotiations, including why repeat market players will give minority holdouts a fair shake but “hold the line” against nuisance value to avoid giving an inch that turns into a yard. John also breaks down the massive bid-ask spreads — think “Grand Canyon” — between debtors and creditors, why debt funds continue to resist taking back equity, and the software sector’s growing interest in LM solutions. 

The podcast concludes (53:10) with BI’s Noel Hebert joining Negisa and Phil for a roundup of their latest research on Air Baltic, QVC, DISH DBS, DISH Wireless, Hughes Satellite Systems, Telesat, and Xerox.

The State of Distressed Debt podcast is part of BI’s FICC Focus series. Listen on Apple Podcasts and Spotify.