Insolvency and restructuring
Insolvency and restructuring
We help companies and individuals get out of debt - from corporate and consumer insolvency, through the consumer arrangement, to restructuring. As a restructuring advisor's firm we know these proceedings from both sides.
Getting out of debt - company and individual
Because the firm's principal holds a restructuring advisor licence, insolvency and restructuring law is the second pillar of our practice. As a restructuring advisor's firm we conduct proceedings not only as counsel for the debtor, the bankrupt or a creditor, but also as an out-of-court body of the proceedings appointed by the bankruptcy court.
The restructuring advisor licence guarantees a high substantive standard in insolvency and restructuring law, which translates into credibility in our clients' eyes. It combines knowledge of law, economics, finance and business management.
We start by assessing the situation and choosing the right path - not every case calls for insolvency, and sometimes an arrangement or a restructuring is the better solution.
Cases we handle
Consumer insolvency
Debt relief for individuals not in business, mostly under the simplified procedure.
Corporate insolvency
From the petition to the distribution plan - preserving the business where possible.
Consumer arrangement
Consumer restructuring that shields the debtor's assets from enforcement.
Company restructuring
Four types of proceedings, in particular proceedings for the approval of an arrangement.
Acting for creditors
Filing claims and taking part in the proceedings on the creditor's side.
Court-appointed roles
Acting as trustee, arrangement supervisor, court supervisor or administrator.
How we work together
Free consultation
We discuss the situation and assess the documents and liabilities.
Choosing the path
We point to the right solution - insolvency, arrangement or restructuring - and the terms, including instalments.
Petition and representation
We prepare the petition and the documents and represent you in the proceedings.
Running the proceedings
We run the matter through to completion, keeping you informed of progress.
Insolvency law
Three ways out of debt
Consumer insolvency, corporate insolvency and the consumer arrangement have different aims and run differently. Below we explain how they differ and what each means in practice.
Consumer insolvency
Consumer insolvency is a form of debt relief for natural persons not conducting business activity. Importantly, a shareholder in a capital company - a limited liability company, a simple joint-stock company or a joint-stock company - also counts as such an individual. For these persons insolvency is in most cases conducted under the simplified procedure, which means the proceedings are less formalised and therefore quicker.
In consumer insolvency the priority is to relieve the individual of debt. Once the court issues the order declaring bankruptcy, a trustee is appointed to assess the grounds of insolvency and the bankrupt's financial and asset position, to liquidate the assets and to prepare a draft resolution: a draft repayment plan, or information that grounds exist to write off the liabilities without a repayment plan, or to write them off conditionally. The bankruptcy court is not bound by the trustee's position, but the trustee's factual findings are a significant aid to the court.
Importantly, once the court issues the order declaring bankruptcy, enforcement proceedings are suspended and, once the order becomes final, they are discontinued by operation of law. The process ends with an order of the bankruptcy court setting a repayment plan, writing off all the bankrupt's liabilities without a repayment plan, or writing them off conditionally.
Corporate insolvency
Corporate insolvency has a different aim from consumer insolvency. In consumer insolvency the aim is to relieve of debt an individual who does not run a business; in corporate insolvency the aim is to satisfy creditors to the greatest possible extent and, where possible, to preserve the debtor's existing business - for example by selling an organised part of the enterprise.
As a rule, a bankruptcy petition may be filed by the debtor and by any personal creditor of the debtor. On the debtor's behalf the petition is filed by its representatives, who as a rule are liable for the debtor's obligations without limitation - this is set out in detail in Article 20 of the Bankruptcy Law.
Under Article 21 of the Bankruptcy Law, filing a bankruptcy petition is an obligation for the debtor. The petition is filed within 30 days of the day the state of insolvency arose. Failing to file within that period can have consequences, such as the liability of board members where enforcement against a limited liability company proves ineffective (Article 299 of the Commercial Companies Code).
The aim of corporate insolvency is an orderly wind-down: the trustee takes over management of the business, draws up an inventory of the debtor's assets, liquidates them and prepares a plan for distributing the proceeds so as to satisfy the creditors as fully as possible.
Consumer arrangement
The consumer arrangement is also known as consumer restructuring. Proceedings to conclude an arrangement at a creditors' meeting are opened on the debtor's application, or where the court refers the matter to those proceedings because the debtor filed a bankruptcy petition and did not declare an objection to proceedings for the approval of an arrangement at a creditors' meeting. Granting the application, the court issues an order opening the proceedings and appoints a court supervisor.
The purpose of a consumer arrangement is to avoid a declaration of bankruptcy where the debtor is objectively able to service the obligations but needs organisational and remedial measures. The arrangement makes it possible to spread the debt into instalments, defer payment or even write off part of it.
The arrangement proposals must be framed sensibly, so as to encourage the creditors to vote in favour. This form of consumer restructuring protects the debtor's assets against enforcement.
Restructuring law
Four types of restructuring proceedings
Restructuring proceedings are meant to protect the debtor's assets, increase liquidity and reduce part of the debt. They cover cost optimisation, improving margins, introducing new products and services, and strategic analysis. We conduct them as counsel for the business, and we can also act as arrangement supervisor, court supervisor or administrator.
Proceedings for the approval of an arrangement
Characterised by speed and a low degree of formality. The debtor collects the creditors' votes itself, and the supervisor may be a person holding a restructuring advisor licence.
These proceedings can be used where the sum of disputed claims does not exceed 15% of the sum of claims carrying the right to vote on the arrangement. It is the simplest form of restructuring and the most frequent choice in our practice.
Accelerated arrangement proceedings
Allow an arrangement to be concluded once the list of claims has been drawn up under a simplified procedure. A declaration as to the truthfulness and completeness of the information in the application is required.
The debtor keeps management of its assets but must perform the duties laid down for this type of proceedings.
Arrangement proceedings
Used where the sum of disputed claims exceeds 15% of the sum of claims carrying the right to vote on the arrangement.
The application is examined in closed session within two weeks, or six weeks where a hearing is scheduled. The debtor keeps management of its assets.
Remedial (sanation) proceedings
Allow remedial measures to be carried out and an arrangement to be concluded. The court appoints an administrator and removes the debtor's own management.
In return the debtor gains complete protection against enforcement by creditors. It is the most far-reaching but also the most effective route where the business is in deep difficulty.
Let's assess your situation
The first consultation is free and without obligation. Together we will choose the best way out of debt.