Category Archives: Business Restructuring

Business Workouts and Restructuring

slide-business-unitsIn situation when a business is losing money and facing a numerous debt and where they are unable to pay them, a business workout or turnaround can help the business to bounce back from this downfall.  A business workout is necessary to review all the assets and liability of a business.

Depending on the situation, a business workout may include one or more of the following:

  • Renegotiation or replacement
  • Request for consents or waivers
  • Forbearance agreement
  • Standstill and tolling agreement
  • Deed in lieu of foreclosure
  • Asset sale
  • Lease assignment or amendment
  • Partnership amendment
  • Corporate restructuring
  • Public or private debt restructuring
  • Asset or business sale

There are other ways in solving financial problems of your company, however workouts are typically the initial option since they do not require a major restructuring or bankruptcy action. If in case the creditors are not willing to work it out with the company, it is best to file a bankruptcy to allow the company to restructure its debt and offers protection to its cash flow and business assets.

Moving on, restructuring is a corporate term that pertains to the reorganization of a company to improve its profitability. Restructuring may occur because of company buy-outs, bankruptcy, or corporate acquisitions. It is in relation to the company’s major business modification.  Some restructurings require an organizational change. This may be the result after a business enters a new market that requires separate business units to share administrative functions or a corporate headquarters to oversee independent divisions. Sometimes a new management team or a small business owner decides to sell part of the business and bring on a new partner or partners.

Lastly, if in case the company can’t meet its capital needs, it might sell stock or take on investors. As a result of which, it allows the business to buy another company, open new locations or add new products to its line. This will also change the financial strategy of the company to increase profit based on its new debt load and long-term financing needs.

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