The Restructuring Spectrum
A quick way to understanding your company’s position and the corresponding solutions is to use our Restructuring Spectrum.
We have coined the phrase “Restructuring Spectrum” to describe the broad range of situations a company may be facing. For each situation there is an appropriate solution and a corresponding service we provide. The more to the left hand side of the spectrum your assessment is, the less drastic is the situation. The more to the right, the more drastic. Similarly, the solutions available are less drastic on the left than they are on the right.
If it is sounding too complicated already then simply CALL US NOW for CONFIDENTIAL FREE ADVICE.
Or if you you’d like to do some more self-assessment read on.
Our overriding philosophy is to find for you the “Least Drastic Solution”. That is, the solution as far to the left hand side of the Restructuring Spectrum as possible. If you managed to place your company in The Restructuring Spectrum you can click through to the corresponding solutions and our services.
Placing your company in the Restructuring Spectrum is not easy so if you are struggling then Ask IRA! – IRA is our Interactive Restructuring Adviser who will ask four questions and then diagnose your company and provide you with suggested solutions. If you think you can self diagnose then check the table below and click through to the right solution.
|Assessment (see below)||Underperforming||Financial distress||Insolvent|
|Solution||Performance Improvement||Workout||Formal Restructuring||Liquidation|
|Restructuring Works Services||Director’s Self Help Checklists||Turnaround Management||Voluntary Administration||Managed Liquidation|
If your company is “Underperforming” it simply means it is not performing at a reasonable standard. There are a range of reasons why and a range of solutions available. Most importantly, be aware that inaction will probably lead to the company moving to the right in The Restructuring Spectrum to be reclassified as Financial Distress or even Insolvent. Most solutions for Underperforming companies involve “Self Help” by the directors. However, sometimes an external party can act as a catalyst to effect necessary change.
Assessment: Financial Distress
If your company is in Financial Distress then action is needed. Almost certainly, inaction will lead to the further deterioration of the company’s financial position and lead to its insolvency. But prompt action can resolve the situation. The solutions offered will normally require a particular skill set and so external assistance is usually required. The solutions available are Turnaround Management and Debt Refinancing.
If your company is classified as Insolvent you must act immediately. That is not just our view, it is required by the Law. Remember, insolvency is not necessarily the death knell of the company. An insolvent company can be restructured. In fact, very sizable parts of the Corporations Law are devoted to facilitating the restructuring of insolvent companies. But you will need professional advice. We break down our categorisation of Insolvent companies further into two types each of which have their own solutions:
- Insolvent-Restructurable: where we use a Voluntary Administration to rescue a company or undertake an Equity raising or Sale of Business.
- Insolvent-Liquidate: where sometimes the only solution for a company is to wind it down and so it is important for a director to control that process through a Managed Liquidation.
Figuring out where in the Restructuring Spectrum your company sits is not easy. If you can’t confidently place your company in the Restructuring Spectrum we suggest you:
- Start with our page Is my company insolvent? It is a good place to start because the available solutions are quite different for a solvent versus an insolvent company; then
- Go to our page Ask IRA! There, we have asked a few simple questions – click on the answers and IRA will give a quick assessment. By the way, “IRA” stands for “Interactive Restructuring Adviser”.
However, if you can confidently place your company in the Restructuring Spectrum then simply click on any of the Solutions and Restructuring Works Services to learn more.