Debtwired! Houlihan Lokey's Gijs de Reuver on the erosion of creditor protections
Sep 4, 2025
Gijs de Reuver, a Managing Director at Houlihan Lokey's restructuring team, delves into the critical issue of diminishing creditor protections in Europe. He reveals the alarming rise of creditor-on-creditor violence and discusses how this poses new challenges in financial distress scenarios. The conversation also highlights recent restructuring court decisions in the UK versus the Netherlands, showcasing significant differences in creditor outcomes. Additionally, Gijs elaborates on the complexities of Credit Default Swaps and their impact on negotiations, stressing the need for transparency.
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Protections Follow Market Supply
- Creditor protections ebb and flow with supply and demand in credit markets.
- Today's loan terms often match bond-like looseness because abundant capital and CLOs weakened lender leverage.
Consent Thresholds Enable Conflict
- Creditor-on-creditor violence arises when transactions require less than unanimous consent.
- Lower consent thresholds (e.g., two-thirds) enable winners to leave other creditors behind.
New Money Creates Winners And Losers
- Borrowers and sponsors often win when new money is provided at others' expense.
- Losers are the non-consenting creditors who get excluded from beneficial deals.