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. Developing a plan restructuring: 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 â in our case it is often a RESTRUCTURING ADVISOR â must contact the creditors to discuss the presented plan restructuring. This may include meetings, presentations and exchange of information to understand and consider proposals.
4 Negotiation of terms and conditions: The parties are negotiating the terms restructuring, such as reducing the debt balance, extending the repayment period, reducing interest or writing off part of the debt. The goal is to reach an agreement that is acceptable to both parties.
5. Approval of the plan restructuring: The final restructuring plan must be approved by the relevant authorities, including creditors.
Negotiations with creditors in restructuring process are a key element of 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 in restructuring process Does mediation play an important role in the process? Mediation plays an important role in the process company restructuring, helping the parties involved to resolve conflicts and reach 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 help in the open and effective transfer of information between the parties involved. Good 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 maintain positive relationships between participants restructuring process. This is important, especially if the parties involved may be involved in future collaboration.
Restructuring is the development of changes and actions aimed at satisfying creditors. to the greatest extent possible, remembering that its primary goal is to keep the company on the market. Conversation, cooperation, mediation are tools that will allow us to achieve the intended restructuring goal, i.e. to conclude an arrangement that is beneficial to all parties.
Negotiations and mediations initiated by the Restructuring Advisor are often a solution to the crisis and help to develop changes. The restructuring process, often related to the financial crisis raises many negative emotions among the 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.
