Negotiation with creditors in the restructuring process? Does mediation help to restructure the company?

Negotiations with creditors in the restructuring process refer to attempts to reach an agreement between a company (debtor) and its creditors to restructure financial liabilities and improve the financial health of the company. The process aims to strike a balance between the interests of the debtor, who wants to avoid bankruptcy, and the interests of the creditors, who seek to recover as much of their receivables as possible.

In order to achieve the objective in the restructuring process, it is important to:

1. identification of financial problems: A thorough understanding of the company's financial position is required before negotiations can begin. This includes an analysis of debt, liquidity, assets and liabilities.

2. develop a restructuring plan: A restructuring plan must be submitted which includes proposals for changes to the terms of repayment of the debt, restructuring of the debt, possible write-off of part of the debt or other measures to improve the financial situation.

3. consultation with creditors: The company - in our case it is often the RESTRUCTURING CONSULTANT - needs to liaise with creditors to discuss the restructuring plan presented. This may involve meetings, presentations and exchanges of information to understand and consider the proposals.

4 Negotiation of terms and conditions: The parties negotiate the terms of the restructuring, such as reducing the balance of the debt, extending the repayment period, reducing interest or writing off part of the debt. The aim is to reach an agreement that is acceptable to both parties.

5. approval of the restructuring plan: The final restructuring plan must be approved by the relevant authorities, including creditors.

Negotiations with creditors in the restructuring process are a key element of the in restoring the financial stability of the company. The right approach to these negotiations can help avoid bankruptcy, minimise losses to creditors and allow the company to continue operating.

So what role does mediation play in the restructuring process? Mediation plays an important role in a company's restructuring process, helping the parties involved to resolve conflicts and reach an agreement.

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1. conflict resolution: Restructuring often brings with it many conflicts between owners, employees suppliers, creditors. Mediation makes it possible to focus on common interests and find a solution that satisfies all parties.

2. Facilitating communication: As Restructuring Advisors and Mediators, we help to communicate openly and effectively between the parties involved. Correct communication contributes to understanding different perspectives and building trust.

3. saving time and resources: Mediation reduces the time needed to resolve a conflict compared to a lengthy court process. Reducing this time is crucial in restructurings where quick decision-making can be critical to the success of the process.

4. cooperation is encouraged: With mediation, we enter a phase of cooperation between the parties. Instead of fighting fierce, costly legal battles, we jointly seek solutions that will benefit everyone.

5. minimise financial needs/losses: Financial savings are important, especially in the context of restructuring, where a company may already be in financial difficulty.

6. Preservation of business relationships: Mediation helps to maintain a positive relationship between the participants in the restructuring process. This is important, especially if the parties involved may be bound to cooperate in the future.

Restructuring is the working out of change, actions with the aim of satisfying creditors to the greatest possible extent, bearing in mind that the primary objective is to keep the company on the market. Conversation, cooperation and mediation are tools that will allow us to achieve the intended objective of restructuring, i.e. to conclude an arrangement that is beneficial to all parties.

Negotiations, mediations initiated by the Restructuring Advisor are often a recipe for crisis and help to work out changes. The restructuring process, often associated with a financial crisis, arouses many negative emotions among stakeholders of a given proceeding. Thanks to efficient actions, mediation and experience, we achieve the goal of concluding an agreement and preserving the company on the market.