What is a 'workout' in the context of restructuring?

In the context of restructuring, a 'workout' refers to a negotiated resolution with creditors. This process typically involves discussions and negotiations between a distressed company and its creditors to find mutually agreeable terms that allow the company to address its financial difficulties without resorting to bankruptcy.

During a workout, the involved parties may agree to defer payments, reduce the principal amount owed, change the terms of existing debt, or develop other solutions aimed at providing the company with the immediate liquidity it needs to stabilize its operations. The goal is to achieve a successful compromise that allows the company to continue operating while satisfying creditor claims to the best extent possible.

The other options provide different contexts that don't align with the specific definition of a workout. A company’s recovery plan generally involves a broader strategy for long-term recovery rather than just resolving specific creditor issues. A government program for insolvency typically refers to formal procedures like bankruptcy, which differ from the informal nature of a workout. A market analysis for distressed assets focuses on evaluating the value and market potential of assets rather than addressing the direct financial negotiations with creditors.