Company restructuring

There are many reasons why a company or group of companies decides to restructure its affairs. You may want to:-

  •   Facilitate a tax efficient sale of the business
  • Ring-fence financial risk
  • Provide commercial independence for business divisions
  • Improve the capital gains tax position for shareholders
  • Provide a structure to enable businesses to be run more dynamically and effectively
  • Avoid Insolvency or personal guarantees
  • Creditor problems

Our specialists have considerable experience to help implement the changes and meet your needs. We know how to avoid the potential obstacles which may involve:

  •   a statutory demerger
  • a complex group reorganisation
  • a reconstruction that involves a Section 110 liquidation or
  • some other type of restructuring exercise such as a pre-pack administration, insolvency etc.

Restructuring is the legal & financial dismantling of a company and its rebuilding in a viable form. Pre-pack administration, when appropriate is a particularly effective restructuring tool because:

  • It is fast & cost-effective;
  • Debt write-off usually exceeds the required funding of the intervention;
  • Increased restructuring is possible as contracts such as leases, hire purchase agreements, etc. may be renegotiated or terminated;
  • It avoids bankruptcy; necessary for some professionals to be able to practice.

Company restructuring differs from normal financial management. Negotiation is a key feature and valuation may be from an insolvency stand-point.

Pre-Pack Administration

The most commonly used product within insolvency services is a pre-pack administration. The deal is reached by pre-appointment with an insolvency practitioner of our recommendation. This allows the Directors of the company to purchase the assets back, pre-appointment in preference to other creditors (with the exception of debenture holders). It has been proven that the continuity of trading that pre-pack administration offers increases the probability of retention of employees. By effectively writing off un-secured creditors the new phoenix company can become profitable.

Advantages of pre-pack administration:

  • The sale of the business assets & undertaking is agreed in advance;
  • The Director’s personal credit history is protected;
  • The business may apply to trade under a variation of the original name;
  • Minimum disruption occurs and it is possible that some staff and customers may be unaware of the change;
  • The existing company could eventually be dissolved by the IP as opposed to placing it in liquidation or bankruptcy. This reduces cross-contamination of reputation and credit worthiness;
  • There is no creditor meeting for the liquidation of the old company or requirement for local advertising or filing in the local courts.

A pre-pack administration is an invaluable tool – it works!

We have completed many pre-pack administrations and we are one of the south wests most experienced insolvency experts and work with all the Insolvency Practicioners in the South West.
What Next?

If your business has problems, close to insolvency or is feven ast growing and you need advice on the next move, the current economic climate would, by default, offer the perfect opportunity. If you are interested, we are happy to discuss your requirements and thereafter suggest an initial meeting, after which, if we believe there is a possibility we can help we will arrange a free visit.

Please call 01453 872666 for further information.