Corporate recovery is the process of ensuring the owners, creditors, suppliers and employees of financially distressed businesses to get the best possible deal. In today’s volatile business environment companies find it increasingly challenging to discharge their debts or recover their credits. Depending on the degree of financial distress, corporate recovery could result in rehabilitation of the business or liquidation of the business. When companies are exposed to financial difficulties and the business is still viable, then a business turnaround is achievable with the help of expert restructuring strategists. When such recovery is not feasible, and the company is irredeemably insolvent, then the insightful advice is essential to liquidate the business with the most optimal outcomes for all the stakeholders.
Whether you are a business owner looking to restructure your business, manage your crisis or wind up your business in an orderly manner to preserve the goodwill, or a creditor seeking to protect your interests, our experienced specialists will work with you to maximise the financial outcomes by offering practical and cross-disciplinary solutions. When dealing with distressed companies, upholding the interests of the stakeholders is paramount, and our specialists are capable of creating value even in the most challenging cases.
Investigations and Litigation
When a company is trading at a loss, and its losses are irrecoverable, then there is no choice but to liquidate. When the company is insolvent, then the management may voluntarily decide to liquidate its assets to settle outstanding debts of its creditors and bring it to an orderly closure. In such circumstances, the company can convene a meeting with its creditors and commence the liquidation process after securing a resolution from creditors. Such liquidations are known as creditors voluntary liquidation.
Even when the company is solvent, the members/shareholders may voluntarily liquidate a company if it has ceased operations or if the business is no longer viable. It could be voluntarily liquidated for reasons of consolidation and restructuring or tax efficiency purpose, or when there is a deadlock among the members of the management or shareholders and the business cannot be sustained.
When a company is insolvent and unable to pay its creditors, and has wilfully neglected the statutory demands of the creditors to repay their monies, then creditors would petition the court for compulsory liquidation of the company to recover the funds owed to them. Though mortifying at times, liquidation is the most optimal solution for the directors of severely distressed businesses as it would resolve the crisis and prevent them from becoming personally liable for the company’s debts.
Learn more about Corporate Recovery at InCorp Global.
