What are some of the risks associated with a restructuring process for companies?

Loss of stakeholder confidence is a significant risk associated with a restructuring process. During a restructuring, uncertainty often leads to concerns among stakeholders, including creditors, investors, employees, and customers. These stakeholders may perceive the company's situation as more dire than it is, potentially leading to a decline in trust and support. This loss of confidence can manifest in several ways, such as reduced investment, withdrawal of support from key business partners, or a decrease in employee motivation – all of which can adversely affect the company's recovery efforts and future prospects.

In contrast, the other options do not accurately reflect the common risks of restructuring. Improved market perception and increased employee morale are often potential outcomes of a successful restructuring rather than inherent risks. Additionally, guaranteed financial improvements are unrealistic since restructuring efforts can sometimes lead to further complications, making it impossible to assure investors of positive financial results. Thus, highlighting the risks while recognizing potential positive developments helps provide a balanced view of the restructuring process.