Restructuring

Solutions for distressed companies

Different solutions are available depending on the level of the distress, including:

1. •

   a quick fix change to current management

2. •

   a consensual restructuring, using a standstill agreement and restructuring agreement

3. •

   a non-consensual restructuring such as a pre-pack administration, or

4. •

   formal liquidation or enforcement of security

Benefits of restructuring

The main benefits of restructuring include:

1. •

   greater returns than on liquidation

2. •

   less publicity

3. •

   more flexibility

4. •

   existing management/directors are retained, and

5. •

   less stigma than liquidation

For a discussion of the benefits of a consensual approach rather than a formal one, see Practice Note: Benefits of informal restructuring over formal proceedings.

Process

The key stages of the process include:

1. •

   agreeing