Out-of-court Restructuring and restructurings can be a way to avoid bankruptcy or bankruptcy court Restructuring , designed to save a company in financial distress with minimal losses to creditors.
Out-of-court solutions to a company's financial challenges must be found in close cooperation between the company's management, owners and creditors, and require a deep understanding and ongoing analysis of how the company can be saved with the least possible loss to creditors in accordance with the principles of bankruptcy law.
We offer specialized advice and assistance to creditors, unsecured creditors, as well as financially challenged companies and their management teams. Our goal is to guide our clients safely through financial crises using our extensive experience in both the legal and financial disciplines.
An out-of-court Restructuring will often have elements of a voluntary arrangement, where creditors must approve a small payment and write off a portion of their claim. Often, divestment or re-mortgaging of assets will also be required in combination with the composition. Finally, group relationships may include elements of restructuring, where the group's companies or activities and internal balances are restructured or liquidated.
An out-of-court solution for a financially challenged company requires an understanding of a number of legal disciplines as well as financial literacy.
We have extensive experience in handling companies in financial crisis and have an overview of the numerous legal challenges that need to be taken into account.
With CLEMENS, you get a partner who not only has the expertise, but also the understanding needed to manage risks and steer the process safely through an economic crisis.
FAQ
The legal framework for out-of-court Restructuring in Denmark is based on voluntary cooperation between the company and its creditors. Although there is no formal legislation specifically for out-of-court reconstructions, the process must comply with applicable bankruptcy law and the principles of bankruptcy law and company law, among others. This includes equal treatment of all creditors and compliance with a number of special laws.
To negotiate a voluntary composition with creditors, the company must first prepare a detailed proposal that presents a plan for payment, restructuring or debt write-off that is realistic in relation to the company's financial situation. Then, the company must enter into negotiations with its creditors to obtain their approval of the arrangement. It is crucial to communicate openly and honestly about the company's financial position and prospects.
The most common pitfalls of corporate restructuring include underestimating the legal and financial risks, failing to communicate and cooperate with creditors, neglecting to prepare a detailed and realistic restructuring plan, and not considering the long-term viability of the company. It is also seen to overestimate the value of the company and potential future earnings, which can lead to unsustainable deals.