RESTRUCTURING GUIDELINES
There are many circumstances that can negatively impact the performance and sustainability of an SME Business.
The critical thing is to spot such circumstances early and to take action/professional advice promptly to ensure early resolution of the issues involved.
The following restructuring guidelines provide a road map that can assist in developing a strategy and action plans that will help to return the business to a viable position over a period of time with the support of key stakeholders such as your Bank, your creditors, and your debtors.
The key message is to act promptly and decisively with proper guidance and advice noting the fiduciary duties of the Directors.
Key Questions to ask:-
I am in trouble because:-
- My trade creditors are pressing for payment.
- The Revenue Commissioners are pressing for payment.
- The Bank are pressing for payment.
- The Landlord is pressing for payment.
What can they do?
1.
- Obtain a Judgement.
- 21 days notice.
- Petition to wind up if undisputed debt.
- Appoint a Liquidator.
2.
- Obtain an Attachment Order.
- Obtain a Judgement.
- Petition to Wind-Up.
- Appoint a Liquidator.
3.
- Obtain a Judgement.
- If secured debt – appoint a Receiver.
- If Personal Guarantee – Enforce Personal Guarantee.
4.
- Distrain/Evict or same options as trade creditors.
What can I do?
- Pay Creditors.
- Seek appointment of an Examiner.
- Defend Action.
- Appoint a Liquidator.
Where do I get finance?
- Free Assets.
- invoice discounting arrangement.
- Sale/Part sale of business.
What effect has the appointment of an Examiner?
- Independent Accountant’s report and give opinion that there is a reasonable prospect of the survival of the company.
- Court protection period 70-100 days.
- Suspend rights of secured creditor for the protection period.
- Examiner formulates proposal for a scheme of arrangement for members and creditors to vote on.
- Examiner has no executive role, Directors remain in day to day control of business.
What effect has the appointment of a Liquidator?
- Call a meeting of the members and creditors.
- Pass a Resolution to appoint a Liquidator.
If I am in trouble what should I do?
- Be proactive
- Identify the issues.
- Look to address the issues in a speedy fashion.
- Seek help
- Speak to creditors to seek their support.
- Maintain accurate records
- Know the full extent of the problem in financial terms
- Recognise you are not alone
- Remember this is not unusual in the current climate and there are mechanisms that allow you to deal with the matter in an orderly fashion as mentioned above.
In summary, be proactive and model your business to the new environment, review debt/creditor arrangements and engage/negotiate with your banks/creditors early to assist in planning and execution of debt/creditor strategies.
Companies who are vigilant in managing their debt/working capital requirements have the best prospects of long term viability and positioning themselves for future growth opportunities.
Restructuring Contacts:-
BDM Boylan Solicitors,
Clarkes Bridge House,
Hanover Street,
Cork
T: 021 4313333
M: 087 9768816
tleahy@bdmboylan.ie
BDM Boylan Solicitors,
Clarkes Bridge House,
Hanover Street,
Cork
T: 021 4313333
sfogarty@bdmboylan.ie
BDM Boylan Solicitors,
Clarkes Bridge House,
Hanover Street,
Cork
T: 021 4313333
DD: 021 4937854
pmullins@bdmboylan.ie