Definition for : Financial distress

Financial distress covers both the difficulty a firm has in meeting its Debt obligations and the consequences of these difficulties, which may take the form of restrictions imposed by creditors on a company's behavior (for example, a company may find it impossible to raise new funds).

(See Chapters Chapter 34 Debt, equity and options theory and Chapter 35 Working out details: The design of the capital structure of the Vernimmen)

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