Breathing life into the undead - reviving old businesses with debt-for-equity swaps
Zombies are increasingly a feature of teen fiction, much as zombie companies are becoming a regular feature of our post-crisis business world. And as in popular fiction, banks, investors and other business executives are trying to work out just what to do with them: should life be breathed into them, should they be killed off or is their 'undead' status largely harmless? The moniker 'zombie' is probably unfair in a corporate context, for so-called zombie companies do not, in the main, meet Wikipedia's qualification criteria: ie "being bereft of consciousness and self-awareness, yet ambulant and able to respond to surrounding stimuli".
Offshore jurisdictions such as the Cayman Islands offer a flexible company law regime that is attractive for those looking to save ailing businesses through debt-for-equity swaps, says Robert Duggan
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