Corporate Financial Rescue by RJC Financial Management Bromley, Kent

Options for the Company

Reorganisation	Sell non-essential assets or alter company structure to return to profitability. Close divisions, make redundant, manage cashflow or sell part/all of business . Sale of business.
	Advantages	Disadvantages
	Maintain existing trading activities Preserve relationships with employees, suppliers and other interested parties Retain control of company	Must be foreseeable future for company Difficult to do correctly
Informal arrangement	Negotiate with creditors individually to achieve a settlement of the entire debt, reduce interest payments or extend terms of agreement
	Advantages	Disadvantages
	Cheap to achieve Can reduce pressure if agreement reached	Not legally binding Not all creditors may agree May impact ability to trade with essential suppliers
Company voluntary arrangement (CVA)	Formal agreement with all creditors to agree settlement of debts at a rate usually less than 100%
	Advantages	Disadvantages
	All creditors bound No come back from creditors as long as agreement is maintained Agreement is completely flexible Costs of CVA and payments to creditors can be drawn from contributions All creditor action frozen Retain control of company	Needs 75% in value of creditors to agree Only those creditors who have received notice are bound by terms Can be costly to achieve Could last up to 5 years
Administration	Court process to instruct insolvency practitioner to take control of company and realise assets, from selling business to forced sale
	Advantages	Disadvantages
	Ability to continue trading so as to maximise realisations Business may be sold and employees’ jobs saved	More costly than liquidation Lose control of company Investigation into conduct of directors
Liquidation	Normally closure of company and forced sale of all assets. Appointment of insolvency practitioner to take control of company.
	Advantages	Disadvantage
	Closure of financial problems	Lose control of company Termination of business Employee redundancies Investigation into conduct of directors