Restructuring processes of a company at risk of insolvency in cooperation with a restructuring advisor

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 tools to carry out the restructuring process. These can be special procedures such as arrangement proceedings, sanitation proceedings, accelerated arrangement proceedings, proceedings for the approval of an arrangement or consumer agreements, or bankruptcy processes opened at the request of the entrepreneur, the so-called "controlled bankruptcy"

The main and most common objective of restructuring proceedings is to conclude and approve an arrangement with creditors.  How to reach and achieve this process is a very individual matter. In each case, it results from the objective of the entrepreneur in question and his or her expectations. The restructuring process should be prepared and planned in such a way that the objectives are adapted to the crisis situation and the company's capabilities. The restructuring process may also involve managing the company's assets in such a way as to optimise their value in order to meet obligations to creditors. A liquidation scenario is also possible, where part of the assets (redundant from the point of view of the company) are put up for sale in order to obtain funds to repay creditors and the size of the company's assets is adapted to the needs and capabilities of the company.

Let us remember that in most cases, restructuring is aimed at preserving the continuity of the company's operations, not at liquidating it. A company may seek financial recovery, 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 bankruptcy, in order to get out of trouble and start a business based on a new legal entity. The initiation of a restructuring must be carried out with a thorough analysis to prepare the further architecture of operations.

Who is the restructuring advisor in this process?

A restructuring advisor is a specialist whose job 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 an analysis of the situation, the adviser develops a restructuring strategy, which may include negotiations with creditors, the development of a repayment plan, debt restructuring, operational changes or the sale of assets;

    3. negotiations with creditors

    A restructuring adviser can represent the company during negotiations with creditors to obtain better repayment terms or to propose an arrangement that will enable the company to avoid 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 restructuring process, the adviser may propose changes to the company's organisational structure, operational improvements or cost reductions 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. monitoring and adjusting the restructuring plan

    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 adviser usually acts as an independent expert, who is able to look at the company's situation from the outside and provide objective and competent advice. Its aim is to help provide a sustainable solution to the company's financial problems.

    The long-standing experience of the PMR Restructuring Law Firm shows that good cooperation and mutual trust between Entrepreneurs and Restructuring Advisor make it possible to achieve jointly developed business objectives in restructuring proceedings.