Private Equity: Distress Implications of COVID-19
July 24, 2020
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Addressing the fallout from COVID-19 and the related governmental response has become a full time job for many private equity funds and their portfolio companies. Almost all segments of the economy are impacted. Some portfolio companies saw revenues go to zero virtually overnight. Others are struggling to keep up with demand for their products or services. Although the specific impacts are different, all funds and their portfolio companies are dealing with a changing legal and regulatory landscape as well as issues ranging from credit facility defaults to employee and workforce management issues. Reopening has brought its own challenges with inconsistent government regulation, employee and customer health and safety issues, rollbacks, and the specter of litigation. Deploying new capital in this market is also challenging—although distressed opportunities are likely to be available particularly later this year and into next year.
As funds assess the impacts of COVID-19 on their portfolio and think about how to invest in this market, we highlight the following areas where O'Melveny can provide assistance. Working with our Coronavirus Task Force, O'Melveny provides support for our private equity clients as they confront the problems created by the pandemic. Our team looks forward to working with funds and their portfolio companies to help address the issues in the article linked below.
Full Article: Private Equity: Distress Implications of COVID-19
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Nancy Mitchell, an O'Melveny partner licensed to practice law in New York and Illinois, Peter Friedman, an O'Melveny partner licensed to practice law in the District of Columbia, Jeffrey Kohn, an O'Melveny partner licensed to practice law in New York and New Jersey, Matthew Hinker, an O'Melveny partner licensed to practice law in New York and Delaware, and Eric Zabinski, an O'Melveny partner licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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