Advisory & Restructuring
Our advisory and restructuring team provide a wide range of services to lenders, borrowers, and company directors.
Our approach to all assignments is to combine our sectoral experience, financial and legal knowledge, and commercial acumen to bring about the most favourable outcome for our clients.
To find out more about the services we offer in this area please click on the name of the service areas below:
The successful completion of large transactions and commercial projects often requires a range of skills and experience outside those available in the promoter’s organisation. We have extensive experience of assisting clients in these circumstances. Whilst undertaking such assignments we are able to draw upon a combination of our technical knowledge, past experience, and commercial acumen.
We have particular experience in the following sectors:
- Real estate
Corporate restructuring assignments involve devising and implementing schemes of arrangement to help troubled companies return to profitability. A scheme of arrangement can operate formally with court sanction, or informally by agreement with creditors.
Every scheme of arrangement is unique. The most common features of successful schemes include creditor balances being written down / postponed, rents being reduced, and new capital being introduced either by the directors or from other sources.
For a scheme of arrangement to be successful it will be necessary to present a credible proposal to the company’s shareholders, creditors, and other affected parties. Each of the affected parties must be satisfied that their interests will be served by accepting the proposed scheme of arrangement. Creditors are often suspicious of restructuring proposals put to them by company directors. Our experience is that the involvement of external advisors can help to allay their doubts.
It may occur that a minority of parties affected will refuse to approve a scheme of arrangement. In these circumstances it may be possible to make the scheme binding on all parties by obtaining court sanction, subject to criteria set out in the Companies Acts being satisfied.
The success of any restructuring proposal will be substantially affected by whether it is implemented at a sufficiently early stage.
We have worked with many clients on the preparation and implementation of successful schemes of arrangement. We would be pleased to advise and assist directors of troubled companies who wish to restructure their affairs.
Creditors Voluntary Liquidation
The members of a company can decide to wind it up by creditors voluntary liquidation. If by continuing to trade a company would cause loss to its’ creditors, then the directors are duty bound to commence the winding-up process.
The directors commence the winding up process by calling a meeting of the company’s members, and a meeting of the company’s creditors. The winding-up commences when the members resolve to wind-up the company. The members may also nominate a liquidator.
The directors are obliged to appoint one of their number to be chairman at the meeting of the company’s creditors, and to lay a statement of the company’s affairs before the meeting. The chairman of the meeting should deliver a brief report on the company’s circumstances and answer any questions asked. The company’s creditors may appoint a liquidator, who will replace a liquidator appointed by the company’s members.
The winding-up process is completed by the liquidator, who is supervised by the company’s creditors, or by a committee of inspection if one is appointed. A committee of inspection may be appointed by the company’s members and creditors.
The liquidator arranges for the company’s assets to be sold, and for the proceeds to be paid to the creditors in order of priority. The liquidator also makes the company’s employees redundant and arranges for certain amounts due to them to be paid from a fund operated by the Department of Social Protection.
The liquidator is obliged to report to the Director of Corporate Enforcement on the company’s circumstances, and whether the directors acted honestly and responsibly in the conduct of the company’s affairs.
We have extensive experience of advising directors on preparing to wind up insolvent companies, and of acting as liquidator. We would be pleased to advise and assist directors of companies that are considering winding-up in this way.
Members Voluntary Liquidations
When a solvent company is no longer needed, or has ceased to trade, it may be wound-up by members voluntary liquidation.
The directors’ obligation to administer the company (preparing accounts, filing annual returns, etc.) ceases when the winding-up commences.
A members voluntary liquidation commences when the members pass a resolution to wind-up the company and to appoint a liquidator.
The winding-up process is completed by the liquidator, who is appointed and supervised by the company’s members. At the end of the process the liquidator can either sell the company’s assets and distribute the net proceeds to the members, or transfer the assets directly to the members.
A number of tax advantages are associated with members voluntary liquidation. The most commonly considered tax advantage is that the funds distributed to the members are taxed as a capital gain, and not as income. Another significant advantage is that a nominal rate of stamp duty applies to the transfer of property from a company to its’ members on winding up.
A company is eligible to be wound-up by members voluntary liquidation when it has sufficient assets to repay all of the company’s creditors within one year of the winding-up commencing. In any other circumstances the company can only be wound up by creditors voluntary liquidation or under the supervision of the court. The directors must prepare and swear a declaration of solvency, which sets out the company’s assets and liabilities, and states that the company satisfies the criteria to be wound up by members voluntary liquidation.
We have extensive experience of advising directors on preparing for members voluntary liquidation, and of acting as liquidator. We would be pleased to advise and assist directors of companies that are considering winding-up in this way.
Review and monitoring
Whilst appraising borrowers’ plans and forecasts it can be difficult to establish whether they are achievable, and will result in the maximum and most timely repayment of loans.
A further difficulty arises in monitoring the borrower’s ongoing adherence to the plan.
We are experienced in conducting detailed reviews of borrowers’ business plans, and assessing whether they are credible and achievable. As part of these reviews we consider the following:
- Validity of assumptions made,
- Valuation of assets,
- Reliability of borrower’s income stream,
- Necessity of borrower’s proposed overhead costs,
- Method employed in forecasting or modelling,
- The borrower’s capacity to deliver the forecast outcomes.
We also consider whether the borrower’s proposals are likely to yield the most favourable outcome for the lender, and if a different approach is warranted.
We are also experienced in conducting ongoing monitoring of borrowers adherence to plans agreed with their lenders.
Whilst conducting monitoring exercises we report on an “exception basis”. This means that our reports immediately highlight any deviation from the plans agreed between the lender and borrower.
Our reports also distinguish between variations from forecast that result from events internal and external to the borrower.
Our experience is that where borrowers are subject to ongoing scrutiny they are more diligent in adhering to plans agreed with their lenders.
The most important consideration whilst dealing with troubled borrowers is how to achieve the maximum and most timely repayment of debts. Our combination of sector specific knowledge and experience of enforcement engagements gives us a unique perspective on dealing with troubled borrowers.
We are available to provide objective and informed advice on possible outcomes from proposals from borrowers, and on how the amount recovered might be increased.
Some of the issues we have advised on include:
- The optimal timing for enforcement,
- Diversion of assets by borrowers,
- Maximising the realisation from floating charges,
- Structuring loans to maximise the lenders subrogated rights,
- Preferential creditors,
- Transfer of Undertakings (Protection of Employment) Regulations 2003 (TUPE),
- Multi-banked borrowers,
- Potential or actual borrower resistance,
- Circumstances where not all of the borrowers trading assets are charged in the lenders favour.