Restructuring and bankruptcies
Our lawyers assess our clients' needs and conditions in the event of their impending insolvency. We will then propose a course of action and a procedure to restore the viability of the business or to bring it to an orderly end.
Reorganisation usually involves either voluntary procedures, whereby creditors agree to restructure debts and sell assets, or statutory reorganisation.
Company restructuring
The aim of business restructuring is to revive a company's business. It involves restructuring the company's activities and debts, selling or closing down unprofitable businesses and transferring activities to profitable businesses. The district court approves the restructuring plan, which usually involves cutting debts and drawing up a new payment plan for the remaining debts. The company will be forgiven if it is able to comply with the restructuring plan.
Business restructuring can save a viable company in financial difficulties. On the one hand, it provides protection against bankruptcy and, on the other, it is often the last resort to avoid bankruptcy.
It is advisable to file for reorganisation as soon as insolvency threatens, giving your business the best chance of success. Even at the stage when a creditor files for bankruptcy, a reorganisation petition can be filed to obtain protection against bankruptcy.
In our experience, the earlier a restructuring application is filed, the better the chances of success. We recommend that you contact us as soon as insolvency is imminent, giving you more time to react.
To be eligible for reorganisation, a company must be insolvent or threatened with insolvency and the company must be capable of being made viable through reorganisation measures. Lawyer Sotka has experience in dozens of reorganisation proceedings; drafting applications, preparing reorganisation plans and litigating these cases in the District Court.
Bankruptcies and recoveries in the bankruptcy estate
A company can be declared bankrupt if it is unable to meet its debts. The condition is therefore that the company is insolvent. A company can be declared bankrupt either on its own initiative or at the request of a creditor. Voluntary bankruptcy following an own petition may be appropriate if the bankruptcy is already apparent.
We assist in bankruptcy-related litigation, criminal matters and recovery issues. Recoveries involve the recovery of a payment made by a bankrupt company from a creditor who received the payment before the debtor company went bankrupt. The purpose of recovery is to ensure that a debtor in default does not transfer its assets beyond the reach of its creditors or favour one creditor over another.
Situations where a company's accounts have been neglected before bankruptcy, or the company's assets have been ’sheltered’, paying the debts of one creditor and leaving others unpaid, usually involve accounting, tax, debtor dishonesty offences. We also have experience of dealing with these cases in different courts.
Jari Sotka, [email protected], 040 544 0610