Crossover Insolvency Cases

Crossover insolvency cases involve situations where a company is nearing insolvency, but the formal legal process of insolvency (like bankruptcy or liquidation) hasn't begun yet. In these cases, both debtors (companies) and creditors (lenders) have interests that overlap—such as negotiating a recovery plan or restructuring. Managing crossover insolvency requires balancing the rights and claims of all parties to avoid worsening the company's financial difficulties or causing additional losses. Essentially, it’s the tricky period just before formal insolvency, where strategic decisions can influence the company's future and creditor recoveries.