Restructuring Options & Decision Paper
First the right path, then implementation.
We assess restructuring, sale of the business, liquidation and self-administration on an equal footing – without committing to any particular procedure. You receive a decision matrix with a reasoned recommendation. We then implement the chosen path and provide legally sound support to management and shareholders along the way.
Who it is for
For management and shareholders who have a decision to make
Typical situations in which clients come to us:
- Liquidity is getting tight, and the planning no longer reaches far enough.
- Lenders or trade credit insurers are increasing the pressure.
- The shareholders are asking themselves whether further funds would be well spent.
- There is a prospective buyer for the company – but is a sale the best way forward?
- Management wants to know where its duties and liability risks lie.
Through every phase
Legally sound support: duties and liability of management in a crisis
In a crisis, the demands on every decision increase. We make sure that management and shareholders know, fulfil and can demonstrate their duties throughout the entire process.
Insolvency status
Ongoing review of illiquidity, impending illiquidity and over-indebtedness – not just once at the outset.
Duties of management
Clarity on filing obligations and payments in the crisis, so that no personal liability arises.
Liability-avoiding documentation
Decisions, assumptions and forecasts are recorded in a way that will stand up later.
Protection under company law
Resolutions, approvals and capital measures properly prepared and implemented.
Risks for shareholders
Shareholder loans, collateral and the provision of assets for use – reviewed before they become a problem.
Negotiations and contracts
Legal structuring and documentation of all agreements with lenders, suppliers and investors.
Phase 1
Analysis of the options and decision paper
First, we establish a reliable basis – legal as well as financial. We then assess each realistic option with its opportunities, risks and approximate financial impact. The assessment is open-ended: we are not committed to any procedure or to any particular measure.
The basis
- Insolvency status – monitored on an ongoing basis
- Liquidity, earnings and asset position, rolling 13-week liquidity planning, financing requirements per scenario
- Contracts, collateral, covenants, change-of-control and termination clauses
- Liability risks for management and shareholders
Restructuring
Which levers will work – and who needs to contribute what?
- Operational and financial measures
- Restructuring contributions from stakeholders
- Investor and equity options
- StaRUG instruments
Company sale
What is the company worth – and who could be a buyer?
- Assessment of enterprise value and equity value
- Structured investor process
- Approaching parties who have already shown interest
Orderly liquidation
What does a controlled exit mean in practice?
- Timetable and process plan
- Completion of orders and handling of warranties
- Realisation of fixed assets, current assets and real estate
Self-administration
Is the company suitable – and which route fits?
- Eligibility requirements and preliminary review of the self-administration plan
- Standard proceedings, self-administration or protective shield proceedings
- Insolvency benefit, restructuring instruments, costs of proceedings
Outcome
A decision matrix with a reasoned recommendation
All options side by side – with their impact on the company and on the financial and personal interests of the shareholders. We present them to management and shareholders; the decision is yours.
Every two weeksSteering committee on the status of the scenarios
4 to 6 weeksto the decision paper
Phase 2
Implementing the chosen path
Implementation only begins once you have decided – with the same team.
Restructuring, sale or liquidation
- Action plan with responsibilities, milestones and impact monitoring
- Negotiations with lenders, trade credit insurers, suppliers, customers and landlords
- Legal structuring and documentation, including implementation under company law
- Support for an investor process and crisis communication
- Ongoing advice to management on its duties and on liability-avoiding documentation
Preparing self-administration
- Self-administration plan with financial plan and procedural concept
- Petition and supporting documents, accompanying protective measures
- Preparation of insolvency benefit pre-financing
- Prior consultation with the insolvency court
- Communication and coordination plan for the day of filing
- Ability to act from the moment of filing: payments, accounts, IT, reporting
Working together
What the decision paper is – and what it is not
The decision paper estimates the key restructuring levers so that their financial impact becomes visible. It does not replace a fully developed turnaround concept.
Where a concept, operational restructuring or interim management is needed, we work with your advisers – or recommend suitable partners. We coordinate employment and tax law matters with specialist colleagues.
Clear roles
Whoever advises does not take on the office of administrator or custodian in the same matter.
Frequently asked questions
Questions about corporate crises
When does management have to file for insolvency?
In the case of illiquidity without culpable delay, at the latest after three weeks; in the case of over-indebtedness at the latest after six weeks (§ 15a InsO). Where illiquidity is merely impending, there is no obligation to file yet – this is the period in which most options are still open.
What is the difference between StaRUG, self-administration and protective shield proceedings?
StaRUG enables restructuring before insolvency by means of a restructuring plan, which can also be adopted by majority vote against individual creditors. In self-administration, insolvency proceedings take place, but management remains in office under the supervision of a custodian. Protective shield proceedings are a special form of self-administration for companies that are not yet illiquid; they are given up to three months to submit an insolvency plan.
What personal liability does management face in a crisis?
Once illiquidity or over-indebtedness has occurred, payments made from the company's assets can lead to a personal obligation to reimburse them (§ 15b InsO). In addition, there are risks associated with late filing and with social security contributions that have not been paid. Ongoing status reviews and careful documentation are therefore essential.
When is a sale of the business the better solution?
When the continued existence of the business under a new owner is more realistic than a restructuring on its own – for example because capital or market access is lacking. Whether and how a sale succeeds depends on the value of the company, the circle of interested parties and the right timing; a sale is also possible out of insolvency proceedings.
How early should you seek advice?
As early as possible. Out-of-court restructuring, StaRUG and protective shield proceedings are only available as long as the company is not yet illiquid; StaRUG, in addition, only if the company is not over-indebted. Every week of lead time widens the scope for action.
This information does not replace advice in an individual case.
The earlier, the more options.
Confidential and at short notice – for management, shareholders and their advisers. At six locations: Munich, Augsburg, Nuremberg, Rosenheim, Wolfratshausen and Frankfurt am Main.
