Business Restructuring Services
In the early signs of a business experiencing financial stress, it is vital that its management team takes action.
Our advisory-led restructuring experts are available to help you explore the full range of options available, providing you with practical step-by-step guidance to the best restructuring option in the circumstances.
We are regularly instructed to undertake the following activities:
An extended repayment profile is negotiated with the different classes of creditors. Typically, we present creditors with a plan, explaining the repayment profile and also a comparison with a formal insolvency process. This would enable the existing shareholders and directors to retain control over the company.
This is a statutory procedure brought in to provide ‘breathing space’ whilst the finances of a business are re-organised. It provides protection from creditor enforcement action for a short period of time, long enough to agree a refinancing or injection of capital. The statutory moratorium allows the existing shareholders and directors to retain control of the company.
This is a sale process conducted over a short period of time. It often has the dual objectives of securing a purchaser/investor for the company itself, or a sale of the business and assets via a formal restructuring process. Ultimately, there is likely to be a change of ownership of either the business and assets or the shares in the company. However, in some cases the existing shareholders or directors may be in a position to re-acquire it.
A CVL involves the business ceasing to trade and a Liquidator being appointed to sell all of the assets and distribute the proceeds to creditors.
A repayment proposal is put to unsecured creditors which results in creditors either permanently writing off a percentage of their debts, agreeing to accept repayment over a period of time (usually 3-5 years) or a combination of both. Creditors are entitled to vote on the proposal and if more than 75% of those voting approve the proposal, then all unsecured creditors are bound by it. Other classes of creditors such as secured lenders and HMRC will have different rights. A CVA usually allows the existing shareholders and directors to retain control over the company.
A Restructuring Plan provides the ability to treat separate classes of creditor differently. It also allows certain creditor classes to be ‘crammed down’, assuming their outcome is no worse than the relevant alternatives available at the time. The plan is sanctioned by the Court. There is a tendency for Restructuring Plans to be used in larger organisations with more complex debt structures. A Restructuring Plan can enable some or all of the existing shareholders and Directors to retain control of the business.
The Administration process provides the benefit of a statutory moratorium on legal enforcement, for example a winding-up petition by HMRC. This allows the underlying business to be re-organised or sold. In some cases, a sale of the business and assets is agreed before the appointment of Administrators, who immediately upon their appointment execute the sale agreement. This is known as a Pre-Packaged Administration, which from a customer perspective presents a seamless transition of ownership of the business into a new company and therefore can help to preserve customer goodwill.
Once a company is no longer required or has fulfilled its purpose, shareholders may wish to liquidate the assets and have the funds distributed to them. An MVL is a tax-efficient and solvent means by which to achieve this and ultimately dissolve the company. It is also common for larger groups looking to streamline their group structure to liquidate those legal entities in the group which are no longer required.
Our service explained
Jimmy Saunders, Managing Director, explains the services and benefits clients can expect to receive when working with our Restructuring division.
Why engage KR8?
We know that when a business requires restructuring it can be a very challenging and stressful time for stakeholders. At KR8, we strive to treat all our clients with maximum empathy, compassion and understanding.
With decades of combined expertise, we apply unique perspectives to guide UK businesses through complex restructuring challenges. Our hands-on, pragmatic approach consistently delivers the best outcomes, guided by our values of innovation, courage and unwavering client service.
How KR8’s Restructuring team can help you
Our team includes licensed insolvency practitioners with many years of experience spanning across all sectors.
They are supported by a team of experts and also have access to a network of over 1,000 professionals within the K3 Capital Group of companies.
