If you are like most business people, the concept of corporate reconstruction may not be fully understood. That’s not unusual considering that it’s a specialized service available to the incorporated business.
Firstly the directors must get the company’s full set management accounts in order enable the board to be in a position to assess the best reconstruction options available
- Consider and help put in place finance options available usually debtor finance.
- See all assets surplus to requirements-for additional cash flow( at this stage ,its all about cash flow)
- Negotiate and or bringing about favorable installment arrangements with creditors and if agreed keep them informed. ( its all about cash flow)
- Move all slow-moving stock, even at a loss. ( its all about cash flow)
- Move to collect the debtors (its all about cash flow)
- This might best be described as the informal “fix” where possible, thus, avoiding very costly formal appointments.
- In some instances, it may be open to the shareholders/directors of a company facing financial difficulties to sell the business (on the basis of a proper valuation) to a new company controlled by the same owners. Thereafter the old company can be placed into the hands of a liquidator, who will firstly satisfy him or herself to ensure that a proper price was paid for the business before distributing the proceeds of sale amongst the creditors.
The consequence being that all but secured creditors claim are frozen whilst the administrator designs a program for the company going forward such and such as would appeal to the creditors. This may involve an installment arrangement, the payment per creditor of less than 100 cents on the dollar, accommodation of both. The offering to creditors can be any 1 of a number of options that show to creditors;
1. that the company and administration can service the obligations and
These arrangements are put together in terms of what is known as a deed of company arrangement which is an agreement between the creditors the company and the administrator and so long as the requisite majority vote in favour of that agreement the agreement binds all creditors including those who did not so vote.
Our Philosophy is (and the fact is) that there is a solution to almost every financial problem .