What are the options for a company facing distress or a liquidity crunch?

Answer

Out-of-court: (1) Operational restructuring — cost cuts, divestitures, working capital improvements; (2) Debt amendments / waivers from lenders; (3) Refinancing or new debt (rescue financing, DIP-like loans); (4) Equity injection from sponsor / new investor; (5) Distressed exchanges — exchange old debt for new debt at a discount; (6) Liability management transactions (LMTs) — uptiering, J. Crew trap, drop-down financings.