Corporate Recovery & Restructuring - Getting Your Business Back on Track
Whether you are looking for services as a business struggling with debt or a creditor working to minimize risk and protect your investment, it’s important to develop solution orientated frameworks and customized strategies that meet the expectations of your stakeholders and are aligned with your objectives as you work to navigate from uncertainty, to success.
Here are several services frequently discussed when organizations look to overcome challenges:
Debtor Services
Business Review
This involves a comprehensive review of a company’s current financial position and future business prospects, including an analysis of the status and priorities of secured and unsecured creditors. This type of review is usually conducted as a first step to developing a restructuring or recovery plan and is helpful to both the company and its secured lender(s) in arriving at a mutual arrangement.
Corporate Restructuring – Informal Turnaround
An Informal Turnaround is a voluntary agreement negotiated between a business and its creditors. Informal turnarounds are beneficial because the process is private, whereas formal proceedings are public and can be reported on by the media.
Corporate Restructuring – Formal Proposal to Creditors
In Canada, a company can obtain creditor protection, depending upon its level of debt, by either filing a proposal under the Bankruptcy and Insolvency Act (BIA) or a plan of arrangement under the Companies’ Creditors Arrangement Act (CCAA). Formal Proposals are available to the public.
Bankruptcy
When a company’s financial position has deteriorated to the point where other debt solutions are no longer feasible, an assignment in bankruptcy can be filed. While this option should be a last resort, this proceeding halts further losses to creditors and shareholders.
Creditor Services
Business Review
At the request of a company’s primary secured lender, a Corporate Recovery and Restructuring firm may be engaged to review the company’s current financial position and future business prospects, including an analysis of the secured creditor’s security position and the status and priorities of other creditors. Often this type of is conducted as a first step to help both the secured lender and the company to arrive at a mutual arrangement.
Monitor Appointments
When a company is in the process of implementing a strategy for turnaround, a Corporate Recovery and Restructuring professional can be called on to act as a monitor on behalf of a secured creditor. In these situations, the business often faces conflicting, irregular demands from stakeholders. To alleviate pressure, the Trustee will review operating results and provide the secured creditor with regular, independent reporting updates on the business’ progress and note any changes in their overall security position.
Interim Receiver
When a company’s assets and / or a creditor’s security may be at risk, the Court may appoint an Interim Receiver. The duties and powers of the Interim Receiver are set out in the Court Order that authorizes its appointment. Those duties and powers may include taking possession of assets and exercising control on them, as well as the company’s operations, as the Court considers reasonable.
Receivership
This involves assisting creditors in protecting or liquidating the assets they hold as collateral or operating and selling the business as an ongoing concern using a private or court-appointed receiver. Before determining the optimal form of appointment, there are a variety of issues, mechanisms and legislation that will be taken into consideration.
Bankruptcy
In the unfortunate situation where a company will not voluntarily file for bankruptcy, one or more creditors may apply for a court-ordered bankruptcy. In adversarial situations between creditors and a company, an application to Court for a bankruptcy order and the appointment of a Licensed Trustee may be necessary.
Other Services
Mediating
When a business relationship deteriorates, dispute consulting services are often needed to mediate the process going forward. A Corporate Recovery and Restructuring professional can act as an independent court-appointed monitor / receiver / liquidator of the entity to keep the process on track until and help the process along until dispute is resolved.
Trustee Under Dependant Adult Orders
When an incapacitated adult with significant personal assets, business assets or viable business operations cannot properly manage matters, a Licensed Trustee can step in to assist with substitutive and supportive decision making.
Corporate Executer of Deceased Estates
If the principal of a viable business has passed and there is no defined successor to manage operations, a Corporate Recovery professional will be able to provide management of the organization until a resolution is reached.
Liquidator under Business Corporation Acts
Whether provincially or federally mandated, this involves the orderly liquidation of a business through the applicable Business Corporations Act, typically when the business is solvent and doesn’t require the use of the Bankruptcy and Insolvency Act (BIA).
At first glance, it’s not always easy to decide which debt solution will be best suited to the financial and operational needs of your business. Contact one of our Corporate Recovery and Restructuring professionals today to discuss your options.