Bankruptcy is not the only scenario

A company in crisis, facing the spectre of bankruptcy, resembles a seriously ill person and a restructuring plan involving an arrangement with creditors a healing cure.

A company that is experiencing liquidity problems and perceives impending trouble should react without delay. Growing problems will not resolve themselves.

- It is important to notice the symptoms of a crisis and realise that the company needs help. This is the key to success. Working on the architecture of the restructuring process needed is often combined with changing the existing business model, admits Małgorzata Anisimowicz, President of PMR Restructuring.

The purpose of all the procedures and tools indicated, as recommended by the provisions of the Restructuring Law, is to avoid declaring the company bankrupt. The alternative to this scenario is restructuring through an arrangement with creditors. How can this be achieved?

- By preparing a restructuring plan indicating to creditors and the court the company's current situation, the causes of the crisis, viable and credible ways out of the crisis, related costs, types and sources of financing, forecasts of results and a timetable for the implementation of corrective measures, Małgorzata Anisimowicz enumerates.

Alternatives to bankruptcy

Kształt układu firmy w kryzysie z jej wierzycielami wynika z wnioskowanego przez nią rodzaju restructuring proceedings. Przystępując do negocjacji o zawarcie układu, zarząd firmy ma zapewnić realizację dwóch celów: spłacenie wierzytelności i zapewnienie firmie perspektyw na przezwyciężenie kryzysu i wyjście na prostą.

- These objectives are not contradictory, quite the opposite. While the creditors want their debts to be paid, the company wants to overcome the crisis and continue to grow. This is precisely the arena on which we act as a restructuring adviser. We help a company in trouble to restructure, i.e. to make such changes in the area of its operation that it will be able to generate the funds necessary to repay its debts and enable its development,' explains Małgorzata Anisimowicz.
Creditors, seeing that their debtor is cooperating with the restructuring adviser, making profound changes and starting to repay claims, also tend to interact with the restructuring adviser, learn about alternatives to possible bankruptcy and support in their own way the scenario of overcoming the crisis.
- The word 'alternative' is of great importance to us all. Mastering the crisis situation, creating arrangement proposals that are based on the realities of the company's operations, are a success for both the debtor company, for its creditors and for the state treasury, as the employer, by developing its business, pays taxes,' argues Małgorzata Anisimowicz.

Interest of creditors

The success of restructuring and arrangement measures is a derivative of the interdisciplinary knowledge (economic, legal, management) of the entire team of experts and practitioners supporting the company in preparing a strategy to return to effective operation. Continuous and exhaustive communication between the company and its creditors throughout the restructuring process is also essential.
- Communication is one of the key activities in the work of the company, as well as of the consulting and restructuring company supporting it. It is expressed in the continuous presentation of the company's current situation, the indication of sources of financing of its current activities, profit opportunities and, above all, in the simulation of debt repayment," explains Małgorzata Anisimowicz.

The material appeared in the daily newspaper Puls Biznesu:19 February 2020. We invite you to read the full article:" Bankruptcy is not the only scenario