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Restructuring and finance

Businesses and their structures evolve over time, and may not best serve the business’s present needs – either by being too unwieldy/too simplistic, or not properly reflecting the current needs of the owners, whether for operational of financial needs.

Whatever the driver for the re-organisation, we will work with you and your advisors to understand your goal and devise the path to best achieve it. That could be through assisting you in streamlining or de-merging your solvent business, or in navigating challenging financial pressures.

Restructuring in the face of financial pressure

If you need assistance due to creditor pressure, we can work with you to devise and implement strategic risk protection.

This strategy may include a formal insolvency process led by an Insolvency Practitioner – either through: a Voluntary Arrangement (agreeing compromises with creditors whilst Directors remain in control of the company); restructuring via administration; or winding down the company’s affairs through an insolvent liquidation.

Directors must ensure they act in the interests of the company’s creditors, and take care that any restructure provides for the creditors appropriately. Where seeking a solvent exit, the restructure should secure appropriate financing, gearing, and a commercial structure and management team fit for purpose.

Solvent restructuring

We can assist with consolidating companies into common beneficial ownership, dissolving companies contained within a group, or de-merging a company’s business activities (for instance to separate different business activities into different companies).

The process will inevitably involve tax advice, as merging or separating business activities is likely to trigger a charge to tax (through a transfer of assets). The grouping of companies could be effected by share exchange and hive up/down of a business, and separation/de-merger could is more likely to be effected by solvent liquidation involving a “section 110 Reconstruction”. The process is very much dependant upon the end goal, and the tax implications.

The section 110 Reconstruction is driven by a liquidator, and usually involves the incorporation of several new companies into which the divided assets of the old trading company are transferred.

If you wish to discuss proposals to reconstruct your organisation, please contact a member of the team, who will be delighted to work with you and tax advisors to achieve your goals.

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Mark Cullingford

Mark Cullingford

Partner

Melissa George

Melissa George

Partner