Company rescue

Company rescue is the process of assisting a financially distressed business to avoid insolvency and continue trading. The objective is to restore financial stability, protect value for stakeholders, preserve employment where possible, and achieve a better outcome than liquidation.

Every business faces unique challenges, and the most appropriate rescue strategy will depend upon the company’s circumstances. Our advisers work closely with directors to identify practical solutions and implement a recovery plan designed to return the business to profitability and long-term sustainability.

Depending upon the situation, one or more of the following measures may be considered:

• Restructuring existing debt and negotiating revised repayment terms with
  creditors.
• Raising new finance, securing investment, or introducing equity funding.
• Selling non-core assets to improve liquidity and reduce liabilities.
• Implementing operational changes, including cost reductions, restructuring
  management, or streamlining business activities.
• Corporate rescue, where the existing company is restored to financial health
  and continues trading.
• Business rescue, where the underlying business and assets are transferred to
  a new entity, allowing the business to continue whilst the insolvent company is
  wound up. Usually via a pre-pack Administration.
• An alternate or additional route is a Company Voluntary Arrangement (CVA)

A Company Voluntary Arrangement (CVA) is a formal and legally binding agreement between a company and its creditors, enabling the company to repay its debts over an agreed period whilst continuing to trade.

Our role is to prepare the company and its directors for a successful CVA by ensuring that the proposal is both financially viable and attractive to creditors. This involves a detailed review of the company’s financial position, including its assets, liabilities, trading history, and future prospects.

A comprehensive proposal is prepared which:

• Details the company’s assets and liabilities.
• Explains the circumstances that led to the financial difficulties.
• Demonstrates the steps already taken by management to stabilise the
  business.
• Provides realistic financial forecasts showing the company’s ability to trade
  profitably in the future.
• Sets out how contributions will be made to creditors over the term of the
  arrangement.

One of the principal advantages of a CVA is that the company can continue trading whilst the directors remain in control of day-to-day operations. This allows management to focus on rebuilding the business while addressing historic debts in a structured and affordable manner.

Once approved by creditors, the CVA is supervised by a Licensed Insolvency Practitioner, who acts as Supervisor of the Arrangement and oversees compliance with its terms throughout its duration.