There are many methods of business rescue. What method is best very much depends in the particular circumstances of your business turnaround requirements on the issues which the company seeking company rescue is facing. In order to avoid a formal insolvency process, a company looking for business rescue will often take advice on whether it is possible to bring about a successful business turnaround without having to enter a formal insolvency process. Advice can be taken from an independent business rescue expert.
Company rescue options
There are a number of options with company rescue. These can include
- the more formal company voluntary arrangement process whereby a voluntary arrangement is reached on a contractual basis with the company’s creditors that they won’t bring proceedings whilst the voluntary arrangement is in place. It is also possible for a company to look at a scheme of arrangement which is a more formal company rescue process sanctioned by the court, but it is not a company insolvency process;
- company restructuring such as a sale of non-core assets, debt restructuring, enforcing share security, or obtaining an equity injection into the company;
- a full review of costs and expenses, including the employee and management structure.
Advantages of business rescue
There are many advantages to company restructuring and in using less formal business restructuring methods.
- often, they allow for the goodwill of the business to remain intact and trading to continue, and therefore provide better return to creditors and shareholders compared with formal insolvency proceedings;
- it will probably cost less with a business turnaround than one of the formal processes;
- there is less publicity to a company restructuring/business recovery than a formal company insolvency process;
- an informal business restructuring can be very flexible, particularly useful if there are cross-border elements;
- the directors will usually remain in place on the whole in a company restructuring, and unlike formal insolvency proceedings, they are not subject to automatic investigations by a liquidator.
Our business rescue experts at Francis Wilks & Jones have many years of experience in all aspects of business rescue and company restructuring, and are well placed to advise you on your particular business problems. Contact us to discuss all the options with you.