Restructuring of a company
Updating, optimizing or radically changing the company structure may have various underlying causes. For example, restructuring may be necessary to avoid bankruptcy, or to serve as preparation for the possible sale of a company. However, declining revenues, financial issues or non-profitable business units are often the underlying reasons for restructuring a company and keeping it viable. A well-designed restructuring plan provides a solid basis for a promising restart in these challenging situations.
A successful restart
Restructuring a company or organization needs to be based on a clear plan. The successful implementation of a radical rearrangement of business assets, capital or workforce requires knowledge and expertise. After all, a company in financial difficulty cannot afford to put a foot wrong. Making a successful restart or preventing bankruptcy starts by making a professional, in-depth analysis of the current state of the company. Based on this information, a solid restructuring plan is drawn up and serves as a guideline for the swift and effective reorganization of business activities. An experienced lawyer can offer a solution in this complex situation and ensure a positive outcome.
Restructuring and reorganizing
Restructuring or reorganizing a company in financial difficulty can, in addition to financial and tax changes, also lead to major changes within the organization. For example, reducing the number of employees and changing the terms of employment. A critical review of the workforce and the possible dismissal of employees are matters that require legal advice. Obtaining the correct legal knowledge at the earliest possible stage will ensure the proper implementation and execution of what may be far-reaching measures. This includes drawing up an acceptable redundancy plan or applying the Collective Redundancy (Notification) Act in the event of collective dismissal.
Company restructuring: corporate structure
Anticipating future situations can also be the reason for restructuring a company. Making a company ready for sale, entering into a joint venture, selling business units or arranging business succession often requires a restructuring of the (legal) company structure. Examples include a legal division, a merger or the liquidation of a private limited company. This involves many legal, fiscal and practical issues. Issues that all need to be identified and dealt with as part of a solid restructuring plan.
In the case of acute liquidity problems, financial restructuring is a suitable intervention to create more financial scope. Changing the capital structure creates a financial situation that is more in line with the existing earning capacity of a company. Examples of restructuring finances include refinancing, debt conversion or additional debt financing and the issue or reissue of shares. These profound changes to the structure, operation or balance sheet of a company lay the foundation for a financially stronger future or a promising restart of the company.
Splitting up a company into viable and non-viable units
Another form of a restart is splitting up a company into viable and non-viable units. In this form of company restructuring, the financially healthy parts of a holding company are transferred to a new holding. The unhealthy parts, which are no longer viable or profitable, remain in the old holding company as a result of this split-up construction. In general, a bankruptcy petition will be filed for this company or the company is otherwise liquidated. The split-up construction prevents the ‘healthy’ and profitable business units from being dragged under with the struggling parts of the company.
A restart offers advantages, but is no guarantee for success. Proper legal advice is an absolute necessity. Our specialists in restructuring, insolvency, restarts and bankruptcy law have a proven track-record in shaping and developing business reconstructions. With a decisive and committed approach, we assist companies in financial difficulties and find the best solution in every situation. Saving the company and maintaining business value is always the main starting point in this process. Feel free to contact us for more information. We will be happy to advise and assist you.