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Insolvency rates have been relatively low during the pandemic, but as economic conditions improve and government support measures fall away, there will be an increase in corporate restructurings and insolvencies. We anticipate that Ireland will be a key jurisdiction for cross-border restructurings following on from Ballantyne Re, Nordic Aviation Capital and Norwegian Air in 2020 and 2021. The approach of secured creditors towards defaulting corporate borrowers will be a critical issue in 2022 – whether they will support via consensual restructurings, or action security enforcement or debt recovery proceedings. We also expect certain loans to be packaged for disposal to third parties, some of whom will have loan to own strategies. For SMEs, the initial applications of the recently enacted Small Company Administrative Rescue Process ("SCARP") will be keenly observed. Advisors will want to ascertain whether SCARP will offer SMEs a viable, lower cost process to reach consensual restructurings with creditors.
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