Backed by our experience in this area, we have been providing assistance in conventional insolvency proceedings as well as self-management and creditor-protection proceedings for many years. We have provided assistance in renowned insolvency cases, helping the parties involved to tackle the liquidity-related challenges and providing an indication of possible follow-up solutions.
No matter whether regular insolvency proceedings or self-management proceedings in accordance with Section 270a or Section 270b of the Insolvency Code are concerned, we assist the company as well as all stakeholders with liquidity planning, the restructuring plan and the preparation of the insolvency plan. We also have extensive experience in handling an extensive M&A process.
Ahead of a potential application for the commencement of insolvency proceedings, we sit down with you to work out whether an early step towards creditor protection or a self-management process may be of advantage for you. Where viable, we discuss with you the pro’s and con’s of court-based restructuring as an option during pre-insolvency planning to shield you and other members of your company’s management from liability risks. With respect to specific legal issues, we offer your company the resources of our extensive network so that the right experts are available to you on call in particularly critical situations.
If insolvency has not yet occurred but is already foreseeable, creditor-protection proceedings may be an alternative to out-of-court restructuring or the sale of part of the company. If the responsible lawyers advise the initiation of creditor-protection proceedings in accordance with Section 270b of the Insolvency Code, the first step is to obtain creditor-protection certification from an expert consultant comprising the following elements:
With their long-standing experience in preparing restructuring and reorganization plans and determining their plausibility before and after insolvency, our consultants have the necessary qualifications to issue certification in accordance with Section 270b of the Insolvency Code and, if necessary, to assist the debtor in drawing up restructuring plans as part of self-management proceedings.
In the provisional proceedings, we initially prepare a liquidity preview on a weekly basis in the light of the specific factors of the proceedings after gaining a brief overview of the company’s business performance. After this, we reconcile the budget with the company’s current performance - mostly on a weekly basis - and update the budget. Once the proceedings have commenced, we prepare an extended liquidity preview on a preemptive basis and also update it regularly.
To this end, we work closely with management and accounting as well as the other parties involved in the proceedings. The upshot of this is that management, the parties authorized to represent the company during the insolvency proceedings and the creditor committee are assured of high transparency and are able to monitor the company’s business performance closely.
With the extensive experience that we have gained in preparing plans for out-of-court restructuring exercises, we also prepare plans for in-court restructuring processes as a basis for insolvency planning. Experience shows that a plan for the company’s future complete with an indication of opportunities for returns is also very useful ahead of the investor process.
The restructuring plan, which on request can be embedded in a comprehensive reorganization or long-term restructuring model, allows creditors to compare different options for debt discharge and provides shareholders and investors with a guide to a viable restructuring course.
When the insolvency plan is being prepared, we support the responsible legal staff in calculating a plan quota and a settlement. This is based on the liquidity forecast and a restructuring plan.
What value does a company in insolvency have?
During insolvency proceedings that are managed externally or by the company itself, the break-up or going-concern value is regularly calculated for the company’s individual assets. In such cases, the valuation of the company as a whole helps in weighing up the alternatives for the best possible liquidation as a basis for satisfying the creditor claims (e.g. the evaluation of possible purchase prices if the company is to be sold to an investor).
Enterprise value is calculated on the basis of the principles set out in IDW S 1. In this connection, the valuation method to be applied is selected in the light of the specific requirements of the insolvency proceedings. The discounted cash flow (DCF) in the form of the adjusted present value (APV) approach is particularly suitable in such cases. Generally speaking, the value of the company equals the present value of the expected net distributions.
We help you to calculate enterprise value and with the resultant appraisal of the different alternatives.
Over the last few years, we have advised more than 30 companies in self-management or standard insolvency proceedings. Take a look at our list of references:
We are pleased to arrange for you access to the resources available from our network for advice on procedural law and tax consulting services in connection with insolvency as well as insolvency accounting and insolvency bridge financing, where necessary.