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Crisis and Company Restructuring

Successfully coping with crises

KSB INTAX offers creative, tried-and-tested solutions to cope with company crises. Our experts working together in multi-disciplinary teams develop comprehensive strategies for successful restructuring and execute them. We advise enterprises, partners, managing directors and owners both in out-of-court restructuring as well as restructuring under insolvency protection. Above and beyond this, we also provide all the parties involved in insolvency proceedings advice on all insolvency law issues.

Focal points in our scope of services include: 

  • Crisis and restructuring consultation
  • Self-administration – insolvency plan
  • Securing against the risk of loss of accounts receivable
  • Insolvency law

Crisis and restructuring consultation

If your company runs into a business crisis, our experts will provide you with rapid, effective and pragmatic support with solutions tailored for its preservation.

KSB INTAX will first advise you on how to avoid insolvency in the critical phase. After this, we will support you in refocusing your company with regard to factors such as securing liquidity, re-establishing earnings capacity and restructuring strategies based on the IDW S6 standard. If an insolvency proceeding proves to be unavoidable, there are interesting alternative routes of action with insolvency plan procedures, self-administration and “protective shield” procedures. In these cases, you do not have to place the management of the company in the hands of an insolvency administrator.

We can quickly prepare a precise summary analysis of the company with our multi-disciplinary approach. This will help you speed up decision-making processes on the immediate measures to be taken with a view to restructuring.

In situations of a well-advanced crisis, top priority is assigned to steps ensuring liquidity. We support your company management in such situations by carrying out precise liquidity forecasts on a weekly basis as well as liquidity planning while optimizing the existing cash management system. In such critical situations, the steps to be taken also include a professional analysis of the current liquidity status and establishing the solvency of the company.

One key factor conditioning success in restructurings is communication with the stakeholders involved (creditors, employees, etc.). Comprehensive information and ongoing discussions with banks to provide the financial resources required or the preservation or extension of loans that have already been granted are essential in securing liquidity. We stand at your side here while devising a communications strategy as well as in negotiations on financing. The latter requires a high degree of moderation skills and sensitivity. Our experienced experts have the communicative sensitivity required to develop financing models that will obtain a compromise and to implement these in consensus with all the parties involved.

With insolvency possibly looming, a company crisis can involve a host of liability risks for managing directors, members of the board and shareholders that should not be underestimated. The experts at KSB INTAX will detail legal strategies that take business exigencies into account along with steps to avoid liability so that these and other risks can be effectively coped with.

Self-administration – insolvency plan

Company crises are triggered by a wide range of developments and events and can have a host of causes. Any company could face insolvency as a result of these. Crisis situations like these are a particular challenge for managing directors and shareholders, both in business and legal terms. Impending insolvency can be associated with wide-ranging liability risks, which the management can only effectively avoid by initiating an insolvency proceeding. On the other hand, the opening of standard insolvency proceedings means that the management of the company and hence its future is for the most part placed in the hands of others. Thanks to our expertise in conducting self-administration procedures, we can help you retain control over the company and its business and show you interesting alternatives to classical insolvency proceedings:  

If insolvency can no longer be avoided or liquidity is insufficient to finance the restructuring measures required, restructuring under protection against insolvency with an insolvency plan under self-administration or a protective shield procedure are possible alternatives. This is especially the case when out-of-court restructuring efforts fail.

With an insolvency plan under self-administration businesspersons are provided an opportunity to attempt a sustainable restructuring of the company which they actively guide without losing their company. In contrast to conventional insolvency proceedings, in which the company management gives up control to an insolvency administrator, decision-making power and control over financial matters remains in the hands of the management. Its company know-how and knowledge of the market remain available to the company. The same familiar contacts for customers, suppliers and staff members are retained. Instead of an insolvency administrator, with self-administration the court merely appoints a trustee, whose latitude of action is limited to monitoring tasks. With self-administration, insolvency no longer means that it is all over for the company and its owner. On the contrary: it offers an opportunity to fundamentally restructure the company, reorganize and realign it.

If planned insolvency under self-administration is successfully carried out, equity is restored and the shareholders retain their shares. Ideally, the procedure will generate so much liquidity that new loans are no longer needed to weather the crisis. The restructuring process under self-administration with an insolvency plan is usually completed in six to ten months.

The protective shield procedure is another form of self-administration. Here the debtor is granted up to three months’ time to prepare a restructuring plan to reduce the debt of the company without any enforcement measures being carried out. This can then be implemented as an insolvency plan. The precondition for the initiation of a protective shield procedure is that the company not yet be insolvent. Compared to the pure self-administration procedure, the protective shield procedure holds out the considerable advantage that it is not perceived by creditors and business partners to be an insolvency proceeding, but rather an autonomous restructuring procedure.

Both procedures are available as alternatives for companies of any size, even self-employed persons and freelance professionals.

The experts at KSB INTAX will help protect you from risks under insolvency law, review the presence of circumstances warranting insolvency, prepare the application for insolvency, the insolvency plan and self-administration in a professional manner and assist you throughout the entire insolvency proceeding. By the same token, we are able to offer all-embracing solutions from one set of hands thanks to the networking of auditors, tax advisors and attorneys. By virtue of our experience in management positions, we not only support companies in an advisory capacity – we also assume responsibility for the implementation of steps in the restructuring of operations, e.g. by acting as managing director in restructuring.

Securing against the risk of loss of accounts receivable

Any company may be impacted by the insolvency of business partners. The loss of accounts receivable resulting from this can be prevented or at least reduced by preventive clauses in contractual agreements, however. We can provide you with comprehensive advice in this regard in order to avoid loss of accounts receivable if your customers become insolvent. We actively support youwhen drafting clauses for customers’ and suppliers’ general terms and conditions that are secure against insolvency as well as in reaching the valid agreement of loan collateral – such as, for instance, simple, broader or longer retentions of title, assignment, guarantees, letters of comfort and rights of lien.

In the preliminary stages of restructuring or if there are indications of solvency problems at one of your business partners, the assessment of possible risks in connection with voidable transactions due to insolvency are absolutely essential. KSB INTAX has experienced advisors who will help you identify and avoid risks associated with such voidable transactions due to insolvency. In our hands, you have the know-how required to design and execute agreements on the payment of instalments, deferral agreements and enforcement measures that are secure in the event of challenges.

If you are dependent on a supplier that goes into crisis or want to continue to deliver goods or render services to a customer that is insolvent, we will show you the steps you can take to preserve the supply relationship without being saddled with any disadvantages or avoidable risks.


Krisen- und Sanierungsberatung

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