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Last time I gave you an overview of the type of work you will be doing in R&R. This blog is part one of a two-part piece onsome of the different stakeholders you’re going encounter in R&R. Part one is on creditors and part two will be on debtors and the government. Most companies are financed at least partially by debt. This can be anything from bank loans to which their assets are collateral to employee expense claims. When a business becomes the subject of insolvency proceedings, this debt gets ranked in accordance with government legislation.

At the top of the pile you will find secured lenders. These are usually banks or syndicates of banks that have made asset backed loans to your client. In November 2009, I met executive directors of three leading banks to discuss a company that they had lent money to. Needless to say, I didn’t lead the discussions, but I challenge you to find another placement scheme that will enable you become involved with a similar crowd.

Next down we have preferential debt. This refers specifically to the claims of employees for elements of unpaid wages and untaken holiday. Employees can be the trickiest to deal with. Calculating and explaining their claims can take some practise, and they are often struggling to meet payments of their own. Preferential debt is unsecured, however ‘unsecured debt’ is often used to refer to all debt that is neither preferential or secured. Unsecured debt, therefore, is everything else. By that I mean supplier payments, shareholder loans, other employee expenses… the list goes on. On a mid-corporate case, there might be thousands of unsecured creditors. You will definitely be involved in dealing with these claims.

If you can talk about this sort of thing in your manager or partner interview then you will be in with a very good chance!

Until next time Harry