Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0012
A business rescue in insolvency can be achieved in two ways: by either selling the business (usually an asset sale transferring the business as a going concern) or restructuring the business. Both options require cooperation—often within the parties of proceedings (creditors, debtor, management), but also with outsiders (investors, customers). Here, the need for cooperation in case of a sale is fairly limited in most jurisdictions because selling the business is simply a way to liquidate the debtor’s assets which may only require a qualified purchaser and a confirmation by a court or even by an administrator (usually an insolvency practitioner; see Chapter 7 for more details). Much more cooperation is usually required where a business must be restructured. If a plan does not only provide for the adjustment of old debt and security rights (financial restructuring), but also for an adjustment of vital credit lines, supply or employment contracts (operational restructuring), a larger number of stakeholders must be brought together.
{"title":"Rescue Plan Issues: Procedure and Structure; Distributional Issues","authors":"","doi":"10.1093/oso/9780198826521.003.0012","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0012","url":null,"abstract":"A business rescue in insolvency can be achieved in two ways: by either selling the business (usually an asset sale transferring the business as a going concern) or restructuring the business. Both options require cooperation—often within the parties of proceedings (creditors, debtor, management), but also with outsiders (investors, customers). Here, the need for cooperation in case of a sale is fairly limited in most jurisdictions because selling the business is simply a way to liquidate the debtor’s assets which may only require a qualified purchaser and a confirmation by a court or even by an administrator (usually an insolvency practitioner; see Chapter 7 for more details). Much more cooperation is usually required where a business must be restructured. If a plan does not only provide for the adjustment of old debt and security rights (financial restructuring), but also for an adjustment of vital credit lines, supply or employment contracts (operational restructuring), a larger number of stakeholders must be brought together.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"277 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115223061","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0036
Polish insolvency law regulations were subject to major reforms when the new Restructuring Law and revised Bankruptcy Law came into force on 1 January 2016. Responses provided in this document reflect the state of the law applicable for that date, unless a specific reference to a later date is made.
{"title":"Poland","authors":"","doi":"10.1093/oso/9780198826521.003.0036","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0036","url":null,"abstract":"Polish insolvency law regulations were subject to major reforms when the new Restructuring Law and revised Bankruptcy Law came into force on 1 January 2016. Responses provided in this document reflect the state of the law applicable for that date, unless a specific reference to a later date is made.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125832530","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0014
The efficient application of an insolvency and, maybe even more, a restructuring framework rests on the assumption of some basic preconditions. The previous chapters should have made it obvious that a successful business rescue depends on institutions (courts, insolvency office holders, public agencies) that work with sufficient efficiency and transparency, a market that offers rescue finance as well as a purchase option for the business (a market price), and sufficient assets in the debtor’s estate to incentivise all participants to actively engage in the process based on the idea that they have something to gain from it (be it the continuation or take-over of the business, a payoff on their debt or a remuneration).
{"title":"Special Arrangements for Small and Medium-Sized Enterprises (SMEs) Including Natural Persons (but not Consumers)","authors":"","doi":"10.1093/oso/9780198826521.003.0014","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0014","url":null,"abstract":"The efficient application of an insolvency and, maybe even more, a restructuring framework rests on the assumption of some basic preconditions. The previous chapters should have made it obvious that a successful business rescue depends on institutions (courts, insolvency office holders, public agencies) that work with sufficient efficiency and transparency, a market that offers rescue finance as well as a purchase option for the business (a market price), and sufficient assets in the debtor’s estate to incentivise all participants to actively engage in the process based on the idea that they have something to gain from it (be it the continuation or take-over of the business, a payoff on their debt or a remuneration).","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128340976","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0042
Various instruments referred to in this Report also include a set of definitions. Therefore, when reference is made to specific recommendations in this Report, these definitions still apply. In addition, the following definitions are provided: Business rescue: Except where specified otherwise, references to business rescue should be understood as encompassing both the rescue of the debtor (such that the entity itself survives) and the rescue of the debtor’s business on a going-concern basis (whether or not the business continues to 1090 be carried on in the same entity).
{"title":"Inventory Report on International Recommendations from Standard-Setting Organisations","authors":"","doi":"10.1093/oso/9780198826521.003.0042","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0042","url":null,"abstract":"Various instruments referred to in this Report also include a set of definitions. Therefore, when reference is made to specific recommendations in this Report, these definitions still apply. In addition, the following definitions are provided: Business rescue: Except where specified otherwise, references to business rescue should be understood as encompassing both the rescue of the debtor (such that the entity itself survives) and the rescue of the debtor’s business on a going-concern basis (whether or not the business continues to 1090 be carried on in the same entity).","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115855120","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0007
The viability of a business depends on the continuation of its essential contracts at least as much as on a successful business idea. Without an essential licence, without energy and goods supply, without a work force, or a lease, the debtors’ business simply cannot continue. Without the prospect of contract continuation (in whatever form), any option to restructure, but also any value maximizing going-concern sale in a liquidation, is off the table. The termination of contracts—by force of law or based on a contractual clause—due to the commencement of restructuring or insolvency proceedings must, therefore, be carefully considered.
{"title":"Executory Contracts","authors":"","doi":"10.1093/oso/9780198826521.003.0007","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0007","url":null,"abstract":"The viability of a business depends on the continuation of its essential contracts at least as much as on a successful business idea. Without an essential licence, without energy and goods supply, without a work force, or a lease, the debtors’ business simply cannot continue. Without the prospect of contract continuation (in whatever form), any option to restructure, but also any value maximizing going-concern sale in a liquidation, is off the table. The termination of contracts—by force of law or based on a contractual clause—due to the commencement of restructuring or insolvency proceedings must, therefore, be carefully considered.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"62 6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131082857","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0013
Since the last decade of the last century, the need to treat an enterprise group in insolvency proceedings as one unit is looking for an adequate legislative answer. An efficient administration of insolvency proceedings related to companies belonging to the same group would minimise costs and loss of time, should minimise losses for creditors, employers and shareholders of the companies, assembled in the group and would maximise the groups’ value. However, national insolvency laws applicable in the EU as well as international proposals are based on the central principle of insolvency law, generally being the principle of the five one’s: one insolvent debtor, one estate, one insolvency proceeding, one court, and one insolvency office holder. It is rather complex to apply this strict legal foundation to the economic phenomenon of a group of companies. Remarkably, however, as of 26 June 2017 the EIR (2015) applies a novelty in that groups of companies are addressed in some twenty legislative provisions, in an aim to ‘… ensure the efficient administration of insolvency proceedings relating to different companies forming part of a group of companies’.
{"title":"Corporate Group Issues","authors":"","doi":"10.1093/oso/9780198826521.003.0013","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0013","url":null,"abstract":"Since the last decade of the last century, the need to treat an enterprise group in insolvency proceedings as one unit is looking for an adequate legislative answer. An efficient administration of insolvency proceedings related to companies belonging to the same group would minimise costs and loss of time, should minimise losses for creditors, employers and shareholders of the companies, assembled in the group and would maximise the groups’ value. However, national insolvency laws applicable in the EU as well as international proposals are based on the central principle of insolvency law, generally being the principle of the five one’s: one insolvent debtor, one estate, one insolvency proceeding, one court, and one insolvency office holder. It is rather complex to apply this strict legal foundation to the economic phenomenon of a group of companies. Remarkably, however, as of 26 June 2017 the EIR (2015) applies a novelty in that groups of companies are addressed in some twenty legislative provisions, in an aim to ‘… ensure the efficient administration of insolvency proceedings relating to different companies forming part of a group of companies’.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131050714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0026
Moreover, Article 61 of law 4307/2014 introduced for a limited time period (ie for applications filed until 30.09.2016) an emergency out-of court-workout providing a combination of tax incentives and public debt relief to qualifying debtors and financing institutions that enter into write off and rescheduling agreements (provided that the write off is either at least 50% of the outstanding balance or, if less, sufficient to restore a debt to assets ratio of at least 75%). For a number of reasons these provisions have been ignored in practice, and the issue of an out-of-court workout framework is once again a matter of negotiations between the Greek government and theforeign institutional lenders of Greece.
{"title":"Greece","authors":"","doi":"10.1093/oso/9780198826521.003.0026","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0026","url":null,"abstract":"Moreover, Article 61 of law 4307/2014 introduced for a limited time period (ie for applications filed until 30.09.2016) an emergency out-of court-workout providing a combination of tax incentives and public debt relief to qualifying debtors and financing institutions that enter into write off and rescheduling agreements (provided that the write off is either at least 50% of the outstanding balance or, if less, sufficient to restore a debt to assets ratio of at least 75%). For a number of reasons these provisions have been ignored in practice, and the issue of an out-of-court workout framework is once again a matter of negotiations between the Greek government and theforeign institutional lenders of Greece.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134278739","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0023
Over the last 12 years, French law has sought to promote the pre-insolvency treatment of companies in difficulty. In 2005, a safeguard procedure was initiated, opened to the debtor who faces proven difficulties without being in default. This procedure is intended to facilitate the reorganization of the undertaking in order to permit the pursuit of economic activity, the maintenance of employment and the payment of creditors. It may end with the adoption of a safeguarding plan which may include partial sale of assets or be converted into a reorganisation or liquidation proceedings.
{"title":"France","authors":"","doi":"10.1093/oso/9780198826521.003.0023","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0023","url":null,"abstract":"Over the last 12 years, French law has sought to promote the pre-insolvency treatment of companies in difficulty. In 2005, a safeguard procedure was initiated, opened to the debtor who faces proven difficulties without being in default. This procedure is intended to facilitate the reorganization of the undertaking in order to permit the pursuit of economic activity, the maintenance of employment and the payment of creditors. It may end with the adoption of a safeguarding plan which may include partial sale of assets or be converted into a reorganisation or liquidation proceedings.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125586722","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0011
For many entrepreneurs, selling your business is an unique, once-in-a-lifetime event. Selling or transferring one’s business to a third party is in many ways radical. First, in a rather irrational way: selling your business means goodbye to what has been built or continued for several years or for decades. Second, more rationally, entering into a selling process brings its own dynamics: informally attracting candidate buyers or find candidates via public marketing, exchanging business information, negotiation phase, a letter of intent, including clauses on confidentiality, due diligence, valuation and price-setting and the role of certain conditions precedent and guarantees in the entire proces, and finally closing the deal and transfer the business. In addition to its specific contractual clauses relevant for each individual sales process, other legal issues surround such a sale and transfer. On the buyer’s side for instance the way to finance the acquisition, antitrust pitfalls, stock listing requirements or requirements for transferring public law permits, certifications and licences or the uncertainly relating to the possible loss of carry forwards against taxation that may require the consent of third parties to be transferred, if they can be transferred at all).
{"title":"Sales on a Going-Concern Basis","authors":"","doi":"10.1093/oso/9780198826521.003.0011","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0011","url":null,"abstract":"For many entrepreneurs, selling your business is an unique, once-in-a-lifetime event. Selling or transferring one’s business to a third party is in many ways radical. First, in a rather irrational way: selling your business means goodbye to what has been built or continued for several years or for decades. Second, more rationally, entering into a selling process brings its own dynamics: informally attracting candidate buyers or find candidates via public marketing, exchanging business information, negotiation phase, a letter of intent, including clauses on confidentiality, due diligence, valuation and price-setting and the role of certain conditions precedent and guarantees in the entire proces, and finally closing the deal and transfer the business. In addition to its specific contractual clauses relevant for each individual sales process, other legal issues surround such a sale and transfer. On the buyer’s side for instance the way to finance the acquisition, antitrust pitfalls, stock listing requirements or requirements for transferring public law permits, certifications and licences or the uncertainly relating to the possible loss of carry forwards against taxation that may require the consent of third parties to be transferred, if they can be transferred at all).","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"182 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132552945","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-03-19DOI: 10.1093/oso/9780198826521.003.0006
With the start of a workout, workout support proceedings, or formal insolvency proceedings, a business enters a new phase in its business life cycle, resulting in a restructured business or, when restructuring fails, the liquidation of its assets. This phase will also give rise to new costs, including fees for the involvement of advisors (legal, financial, turnaround) and, perhaps, a court and an IP. Furthermore, cash restraints must be overcome in order to secure the continuation of the business for the duration of proceedings (interim finance), but also in order to implement succesful restructuring measures following the conclusion of proceedings (new finance or plan implementation finance). Considering the financial situation of a troubled business, financing needs will usually require lenders, instead of shareholders, to provide for cash to meet these costs. At the same time, a stay of enforcement actions and payment dues may serve as a valuable instrument for securing incoming cash flow as well as limited cash reserves for a rescue effort. In this chapter, we evaluate these cash-related instruments.
{"title":"Financing a Rescue","authors":"","doi":"10.1093/oso/9780198826521.003.0006","DOIUrl":"https://doi.org/10.1093/oso/9780198826521.003.0006","url":null,"abstract":"With the start of a workout, workout support proceedings, or formal insolvency proceedings, a business enters a new phase in its business life cycle, resulting in a restructured business or, when restructuring fails, the liquidation of its assets. This phase will also give rise to new costs, including fees for the involvement of advisors (legal, financial, turnaround) and, perhaps, a court and an IP. Furthermore, cash restraints must be overcome in order to secure the continuation of the business for the duration of proceedings (interim finance), but also in order to implement succesful restructuring measures following the conclusion of proceedings (new finance or plan implementation finance). Considering the financial situation of a troubled business, financing needs will usually require lenders, instead of shareholders, to provide for cash to meet these costs. At the same time, a stay of enforcement actions and payment dues may serve as a valuable instrument for securing incoming cash flow as well as limited cash reserves for a rescue effort. In this chapter, we evaluate these cash-related instruments.","PeriodicalId":366238,"journal":{"name":"Rescue of Business in Europe","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123495284","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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