charge). See for discussion of the approaches taken. Restructuring in Europe The "London Approach" Historically, European banks handled non-investment grade lending and capital structures that were fairly straightforward. Nicknamed the "London Approach" in the UK, restructurings focused on avoiding debt write-offs rather than providing distressed companies with an appropriately sized balance sheet. This approach became impractical in the 1990s with private equity increasing demand for highly leveraged capital structures that created the market in high-yield and mezzanine debt. Increased volume of distressed debt drew in hedge funds and credit derivatives deepened the market—trends outside the control of both the regulator and the leading commercial banks. Characteristics Cash management and cash generation during crisis Impaired Loan Advisory Services (ILAS) Retention of corporate management in the form of "stay bonus" payments or equity grants Sale of underutilized assets, such as patents or brands Outsourcing of operations such as payroll and technical support to a more efficient third party Moving of operations such as manufacturing to lower-cost locations Reorganization of functions such as sales, marketing, and distribution Renegotiation of labor contracts to reduce overhead Refinancing of corporate debt to reduce interest payments A major public relations campaign to reposition the company with consumers Forfeiture of all or part of the ownership share by pre-restructuring stock holders (if the remainder represents only a fraction of the original firm, it is termed a stub) Improving the efficiency and productivity through new investments, R&D and business engineering. Results A company that has been restructured effectively will theoretically be leaner, more efficient, better organized, and better focused on its core business with a revised strategic and financial plan. If the restructured company was a leverage acquisition, the parent company will likely resell it at a profit if the restructuring has proven successful. See also Bankruptcy Chainsaw Al Compromise agreement Creditor Debt Demerger Downsizing Insolvency Layoff Presidential Task Force on the Auto Industry Spin-out Stub (stock) Voluntary redundancy References External links Infoworld - "HP to slash 14,500 jobs in major restructuring move" CBC News - "Stelco unveils restructuring plan" Web site of the TRACE Project, a large scale European trade union project that has created a mass of resources, training materials, etc about restructuring Current Financial News from Trending Storiees Web site of the MIRE Project (Monitoring Innovative Restructuring in Europe) including thematic analysis and 30 case studies Corporate Restructuring Consultants India European Restructuring Toolbox on Anticipedia web