Restructuring models

Whether the best solution to your company's cash flow problems is a restructuring requires careful consideration. The entire purpose of restructuring a company is to solve its cash flow problems and any negative balances, thus creating a new basis for the company's survival to the benefit of its employees, future business partners and creditors.

360 degree restructuring advice

The decision on which restructuring model is the best for your business must be based on an individual assessment. We advise our clients on all aspects of restructuring, and our legal services include:

Operational restructurings (so-called turn arounds)
The purpose of a turn around is to improve the cash flow situation and profitability of your business. The sooner the turn around, the better the chances of success. However, that will only be possible if you spot the signs of crisis in time. We can help you assess whether your company is in a situation where a turn around will be of benefit to you and – first of all – possible. 

Divestments, including also:

• Pre-pack solutions preparing the transfer before the commencement of bankruptcy proceedings
• Sale and purchase of distressed companies (distressed M&A)
• Reorganisations

Financial restructurings
The purpose of a financial restructuring is to restore your company's capital base. We can advise you on options such as:

• Debt reductions (compositions with creditors)
• Extension of payment
• Injection of new capital

We also advise on future ownership structures

Bankruptcy
If it is impossible to restructure the company, bankruptcy becomes relevant. We can also help you in this area. We advise on all the legal aspects of bankruptcy [link til undersiden 'Insolvensretlige kerneområder'] and bankruptcy litigation [link til denne underside].

Restructuring (in or out of court)

The restructuring of a company can be carried out with or without court assistance. An in-court restructuring must result in either a compulsory composition with creditors and/or a transfer of the company. An out-of-court restructuring may – and will typically – contain the same elements, but in that case the elements are not compulsory.

Ownership transfer to the next generation by restructuring

Few companies in financial distress are aware that a crisis may present an opportunity to transfer ownership to the next generation and restructure the viable parts of the company. This may give the company a very good chance to survive in a new and improved version.

Ownership may be transferred to the next generation in several ways:

1. Restructuring by a sale to heirs
   
   A restructuring may include the sale of parts of the company. In many cases, the "right" buyer already has relations to the distressed company.
   
   We can identify the options for transferring the viable parts of the company to the next generation, i.e. by a sale to a party closely related to the existing owner or by means of a management buyout.
   
   Our insolvency specialists have vast experience of hiving off the viable parts of a company to ensure the financial viability of the surviving company right from the start. Naturally, this is done in close dialogue with the company's creditors and management.

2. Ownership transfer after bankruptcy
   
   Although in many cases, bankruptcy is tantamount to winding up the company, we always explore the options for selling the viable parts of the company.
   
   Such a sale saves the viable parts of the company, preserves jobs and typically creates a higher value for all parties involved, and it may be a way to transfer ownership to the next generation. We always focus on providing the continuing company with a viable start.
   
   At DLA Piper, we have vast experience of identifying the interests involved and planning the transfer in a manner which satisfies the commercial needs of all parties involved.