Advice on insolvency issues

A new law is targeted at improving the options to restore and save a company by means of insolvency proceedings: On March 1, 2012 the “Law to further facilitate the restoration of businesses” took effect, fundamentally reforming German insolvency law. The new legislation turns insolvency proceedings into an attractive alternative to extrajudicial restoration measures. PwC’s restoration and restructuring consultants offer assistance to businesses in all phases of a corporate crisis – including plan B considerations before insolvency as well as during the insolvency proceedings.

The “Law to further facilitate the restoration of businesses“, abbreviated as ESUG, offers businesses new options for restoration:

  • Management stays in the driver seat – whether there is a protective shield or not. They now have the opportunity to act as debtor in possession.
  • For creditors, the proceedings will be more predictable: They gain influence in appointing the administrator.
  • (External) creditors will now find it easier to benefit from an increase in the value of the restructured business by means of a debt equity swap.
  • It will be easier to resolve the obstructive approach taken by certain parties within the group of shareholders.

PwC offers advice during all phases of a crisis

PwC’s interdisciplinary team of experts gives advice to all possible parties involved in the proceedings, during each phase of a corporate crisis – including plan B considerations before insolvency as well as during the insolvency proceedings. In case the crisis is so severe that initiating insolvency proceedings becomes an option, the parties in charge are faced with a number of decisions and tasks: Not only do they have to gain clarity on the actual financial situation; they also have to consider all possible options and alternatives as quickly as possible.

PwC’s specialists assist businesses in assessing if or at which point there are reasons for insolvency. They can pinpoint to options for restructuring by means of insolvency procedures as an alternative to extrajudicial restoration measures. They will keep an eye on timing, costs, recovery, and risks associated with each scenario in focus.

Depending on the requirements of the parties involved, PwC’s restructuring experts offer advice to businesses worldwide in the following areas:

(Group) Shareholders

  • Carrying out “Insolvency Due Diligence” in preparation of insolvency
  • Drafting a so-called „protective shield certificate“
  • Preparing the option to act as a debtor in possession and supporting the debtor in possession during the proceedings

Insolvency administrators

  • Liquidity planning and support with liquidity management
  • Business planning
  • Carrying out insolvency-specific due diligence und assessing whether a business is insolvent

Creditors/ Financers/ Banks

  • Quota analysis before insolvency
  • Quota calculation based on insolvency scenarios
  • Assessing liquidity and business plans

Investors

  • Support with bidding and negotiating strategy
  • Assessing business plans including restructuring measures
  • Assistance with the implementation process

PwC’s experts are highly experienced in all insolvency issues. They are familiar with the special features of insolvency and will work hard to achieve the best restructuring outcome for all parties involved – by means of insolvency proceedings or other available options.

Contact us

Dr. Frank Girotto

Dr. Frank Girotto

Partner

Tel: +49 89 5790-6456

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