When it comes to understanding current options and situations, it is vital to have access to proactive and highly commercial advice. Hall & Wilcox’s cross-practice team of experts have the knowledge and insight to advise on all areas of insolvency, restructuring and turnaround.
Acting fast in time critical situations
In the current COVID-19 environment, many companies are struggling to 'bounce back' to what they were. There is still uncertainty about what a post-COVID normal will look like, and when.
There is likely to be significant restructuring by all businesses over the next 6-12 months, whether a business is just surviving or thriving and everything in between.
Whether its corporate distress, distressed investing or formal insolvencies, our internationally-recognised team can advise on the best solutions for your situation and help your business navigate through the process and understand the views of all parties involved.
Areas where we are seeing significant impact, and where businesses may need to review, refresh and restructure operations are determined by:
- Industry sectors. Some sectors have been hit harder than others so far. This is expected to evolve and there will be winners and losers.
- How the business was functioning pre-COVID. The emergency measures have allowed some businesses to continue that were not otherwise viable. As these measures end, these businesses will be at significant risk of formal insolvency.
- Supply chain issues. Businesses are already experiencing significant disruption to supply chains caused by mandatory shutdowns and border closures (international and domestic). If suppliers or customers are not viable and are unable to restructure or do not transform quickly enough, alternative markets and suppliers will be needed. This can be anticipated now.
- The balance sheet pain caused by COVID. Many businesses will be carrying significantly higher liabilities. Unless these are dealt with, shareholders may be unwilling to continue to support the businesses. Banking covenants may be breached and lenders may require their loans to be restructured and geared differently.
- The long term consequences of COVID. There will be permanent change to many sectors of the economy and businesses will need to respond and adapt if they are to survive. How are your clients and customers affected? What are your new growth areas? What should you exit?
How we can help
Hall & Wilcox has a proven track record of assisting clients successfully execute business turnarounds and restructures. Our Turnaround and Corporate Renewal team can assist with:
- Providing options for underperforming companies. Quick and decisive action may be needed to stabilise the business in the short term. This involves managing key stakeholders and developing a turnaround (or restructuring) plan. Such plans include: renegotiating debt terms, refinancing and raising new debt; negotiating with key stakeholders; resetting the workforce; divesting non-core assets or acquiring new assets; and capital raising and restructuring equity.
- Protecting directors and officers during a restructure. Hall & Wilcox’s experts can guide directors and officers to ensure that their personal position is protected. Our lawyers can assist directors in a range of situations that may be encountered such as entering and remaining in safe harbour during a restructure to avoid liability for new debts incurred by a company while insolvent, providing advice regarding director duties when solvency is doubtful, advising on avoiding personal liability for tax debts, and ensuring restructures are done lawfully and protected from challenge. Using a lawyer has the benefit that the advice provided will be subject to legal professional privilege.
- Restructuring via a formal insolvency process. Sometimes the best or only viable option may be to restructure one or more entities via a formal insolvency process. Our team can help small business use the small business restructuring process, provide advice on restructuring via voluntary administration and deed of company arrangement and advise on schemes of arrangement.
- Negotiating distressed M&A. Our team is focussed on delivering maximum value in challenging and time critical situations. We can advise at all stages of distressed M&A matters and can look at several options including different acquisition/investment strategies and locking in certainty.
Our team is here to help. We can solve legal issues to allow businesses to find the best path to turn the company around.
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