In the context of restructuring law, the restructuring of a company refers to the process, which aims to reshape and adjust the financial, organisational or operational structure of a business in order to improve its financial health, efficiency or chances of survival. As a set of rules and procedures, the restructuring law aims to help an entrepreneur go through the process to avoid bankruptcy. Let us remember that the purpose of restructuring proceedings, the objective under the law, is to avoid bankruptcy of the company.
Restructuring proceedings are the regulation of restructuring proceedings, which offer companies with tools to carry out the restructuring process. These may be special procedures, such as composition proceedings, sanitation proceedings, accelerated arrangement proceedings, arrangement approval proceedings or consumer arrangements, or bankruptcy proceedings opened at the request of the entrepreneur, the so-called "controlled bankruptcy"
The main and most common purpose of the proceedings restructuring is the conclusion and approval of the arrangement with creditors. How to reach and achieve this process is a very individual matter. In each case, it results from the goal of a given entrepreneur and his expectations. The restructuring process should be prepared and planned in such a way that the goals are adapted to the crisis situation and the possibilities of the company. Restructuring process It may also include managing the company's assets in a way that aims to optimize their value in order to meet obligations to creditors. A liquidation scenario is also possible, where part of the assets (unnecessary from the company's point of view) are intended for sale in order to obtain funds to repay creditors and the size of the company's assets is adjusted to the company's needs and capabilities.
Let's remember that in most cases restructuring is aimed at in order to maintain the continuity of the company's operations, not liquidation. The company may seek financial reconstruction, debt restructuring or a change in business strategy.
It is worth noting that restructuring procedures vary and, depending on the complexity and assessment of the company's crisis situation, there is the possibility of using particular legal norms and tools adapted to the situation. In some cases it is the entrepreneur who needs to "fail" i.e. go through with the insolvency, to get out of trouble and start a business based on a new legal entity. Starting restructuring must be carried out with a thorough analysis, which will allow for the preparation of further action architecture.
Who is the restructuring advisor in this process?
Restructuring advisor is a specialist whose task is to provide professional assistance to companies in financial difficulties, including those struggling with debt.
The tasks of a restructuring advisor include:
1. Analysis of the financial situation
The adviser carries out a detailed financial analysis of the company, identifying the sources of financial problems, analysing the debt structure and assessing liquidity;
2. develop a restructuring strategy
Based on the analysis of the situation, the advisor develops a restructuring strategy, which may include negotiations with creditors, developing a repayment plan, debt restructuring, operational changes or asset sales;
3. negotiations with creditors
A restructuring advisor can represent a company during negotiations with creditors in order to obtain better repayment terms or to present a proposal for an arrangement that will enable the company avoiding bankruptcy;
4 Stakeholder relationship management
An adviser can help manage relationships with various stakeholders, including creditors, suppliers, employees and other business partners, to minimise the risk of loss of trust;
5. Optimisation of the organisational structure
As part of the process restructuring, the advisor may propose changes in the company’s organizational structure, operational improvements or cost reductions in order to improve efficiency;
6. support in the bankruptcy process
If this proves necessary, counsel can help prepare and manage the insolvency process, ensuring the best possible outcome for all stakeholders;
7. Monitor and adjust the plan restructuring
Once the restructuring plan is in place, the adviser tracks its progress and adjusts the strategy as necessary to achieve the desired goals.
A restructuring advisor usually acts as an independent an expert who is able to look at the company's situation from outside and provide objective and competent advice. Its aim is to help ensure lasting solutions to problems financial enterprise.
Many years of experience of PMR Restrukturyzacje SA Law Firm show that good cooperation and mutual trust between They allow entrepreneurs and the Restructuring Advisor to achieve jointly developed business goals in restructuring proceedings.
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