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Deloitte Turnaround and Restructuring (T&R) Newsletter

Insights from developing mergers and acquisitions trends

This newsletter addresses the current state and outlook for the Deloitte T&R practice, including recent engagements, announcements, case studies, and upcoming events. Check out the latest highlights to stay on top of corporate restructuring trends and make the most of the game-changing moments.

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Views from our leaders

Ryan Maupin, Principal

The restructuring market entered 2025 with a noticeably different tone from the cautious optimism that characterized the post-pandemic period. Persistently higher interest rates, continued cost increases, and a pronounced pull-back in traditional lending and consumer spending have squeezed liquidity across the credit spectrum, propelling a steady rise in both formal insolvencies and out-of-court workouts and culminating in downward revisions to Q1-25 GDP. Distress is not confined to single sectors; it now extends from discretionary retail, to health care—particularly rural medical centers—to high burn-rate leveraged technology and life-sciences businesses that have historically relied on inexpensive venture capital (VC) to fund growth.

Several themes are shaping deal dynamics. First, liability-management transactions (LMTs or LMEs)—drop-downs, up tiers and recapitalizations—are proliferating as sponsors seek to protect value ahead of a refinancing wall expected to start in late 2025.1 Second…

Second, speed and optionality are paramount: pre-packs and “dual-track” processes (simultaneously pursuing sale and restructuring paths) are being employed by many to preserve optionality amid volatile valuations. Third, stakeholders—especially direct lenders and private credit funds—are asserting greater influence, frequently trading primacy for control positions and demanding operational turnarounds alongside balance-sheet fixes. While LMTs have decreased traditional restructuring deal-flow in the short-term, expect that many of these transactions may be delayed to a later in-court process or more comprehensive restructuring.

Looking ahead, macro pressures are unlikely to abate quickly as the United States continues to evaluate its tax and trade policy strategies. In this environment, proactive engagement, rigorous cash-flow forecasting, and a holistic transformation agenda—not just cost cutting—remain the hallmarks of successful restructurings. I look forward to working with all of you as we continue to focus on our fundamentals and help our clients turn uncertainty into an opportunity to strengthen their business.

  1. High yield market bounces back, but maturity wall looms

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