Companies with sound market prospects, which for various reasons have had financial issues, can often avoid bankruptcy by way of a company reorganisation. Our task is to assist such companies in reorganising their business and if necessary, to restructure their finances.
You can read more about the company reorganisation procedure here and in the text below.
Informal or formal reorganisation
Company reorgnisation may be either informal, or formal in accordance with the applicable law.
Informal reorganisation is not regulated under the law; therefore, the company basically sets aside its payments and practically freezes the liability side of its balance sheet. The company pays its ongoing expenses in advance or on demand whilst negotiations are initiated with creditors with a view to reaching an agreement on how the debts are to be settled.
The Company Reorganisation Act governs formal reorganisations. First of all, an application is to be submitted to the District Court. In the event that the application is accepted, the District Court appoints an administrator which the company has proposed. In order to be appointed, an administrator must have the organisational capacity, experience and qualifications that all our expert lawyers possess. The District Court's decision, in contrast to an informal reorganisation, implies that a company is protected against a bankruptcy procedure during the period of reorganisation. In this period, the company, in collaboration with the administrator, will draw up a reorganisation plan, which specifies the actions to be undertaken by the company in order to attain profitability and reach a settlement with its creditors. The plan generally includes a composition, which under certain conditions obliges certain non-prioritised groups of creditors to accept that their claims are to be reduced by a certain percentage.