There are a number of reasons a business undertakes a restructuring process – whether to protect personal assets or to salvage a business under financial distress. The below options are available to companies depending on the level distress and the circumstances:
a debt for equity swap (where financial creditors receive equity in the restricted vehicle in return for reducing or cancelling their debt claims against the company);
a transfer of the company’s viable assets or business(es) into a newly formed company (in return for reducing or cancelling their debt claims against the company, creditors may exchange debt in the company for either debt, equity or debt and equity in the newly formed company);
a scheme of arrangement under the Insolvency Act (a statutory mechanism for dividing or demerging businesses or assets held within or owned by a single legal entity, so that after the transaction they are held by two or more legal entities);
a rescue buyout (where a private equity fund provides the finance for a management buyout of a distressed business).
Our Corporate Team work closely with our Debt and Insolvency Team to provide our clients with specialist advice on the restructuring process and expertly guide them through all the complexities and in doing so, aim to mitigate risks and exposures and ensure the best possible outcome.
Over the past two decades, we have worked with various stakeholders involved in the process, ranging from debtor companies, lenders, investors and insolvency practitioners.
Our specific areas of focus include:
CVAs, administrations, liquidations and receiverships, schemes of arrangement,
Corporate governance and director’s duties
Dealings with employees during the restructuring process (to include advice on redundancy and TUPE process).