Things often get very busy before and after the application for insolvency. The uncertainty of all stakeholders responsible and involved is initially high. On the one hand, it is necessary to stabilise the operative business in order to preserve as much value as possible. On the other hand, entrepreneurial decisions may have to be made for the same reason or to secure creditor claims. The (provisional) insolvency administrator must act quickly and in a well-considered manner. We support insolvency administrators in the daily business of insolvency, both conceptually and operationally.
We are happy to take on insolvency-specific tasks (e.g. ordering process) and act either as an integrated part of the organisation or as a link between the insolvency administrator, the company and external stakeholders (customers, suppliers, investors, etc.). With our specialisation in crisis and insolvency situations, we offer a wide range of insolvency-specific services with substantial methodological expertise and management competence. In addition, we regularly support well-known law firms in accompanying and conducting insolvency proceedings, take on operational tasks and help to optimise the mass of assets:
- Quick-check of the company's going concern
- Preparation and validation of the continuation plan
- Expert opinion on the determination of insolvency / over-indebtedness according to IDW S11
- Liquidity planning / monitoring in insolvency proceedings
- Controlling and reporting
- Management of the order and release process
- Preparation and review of insolvency plans
- Preparation and assessment of reorganisation concepts
- Operational continuation in insolvency / interim management
- Optimisation of assets through professional distressed M&A procedures
- Staff equity participation and employee initiatives
A quick check is actually a short analysis, an immediate rendering of your company’s strengths and weaknesses as well as, and in particular, of the key business development risks. A quick check is also an excellent way to sift your company’s major turnaround potential, bringing to light options for courses of action.
Insolvency situations demand that a company’s continuation capacity is established at the onset. Therefore, the Insolvency Statute’s (section 19 German Insolvency Statute (InsO)) continued existence forecast or going concern forecast is the basis for judging a company’s over-indebtedness. A company is judged not over-indebted when circumstances predominantly point to its probable continuation.
As time is of the essence, our quick check concentrates on essential issues which measure your company’s continuation potential:
- Exposing crisis origin and crisis status
- Generating the current financial status and a short-term liquidity preview
- Overview of the current economic relationships between profits, assets and finances
- Marketability and competitiveness
- Defining initial options for measures and courses of action and inspecting their feasibility
- This initial, rapid analysis contributes decisive parameters for determining if and how your company can continue to exist or what is necessary for recovery during (temporary) proceedings.
Drawing from the quick check analysis of continuation ability and of the Insolvency Statute’s continuation or continued existence forecast, we create an integrated business plan (income, liquidity and balance planning) with the added function of a continuation plan. This continuation plan fulfils the following aspects of temporary or ongoing proceedings:
- Basis for controlling business operations
- An assessment component, also for the insolvency administrator’s reporting
- Basis of negotiations for potential debtor-in-possession financing investors
- Information for the insolvency court, potential investors, suppliers and creditors
We determine whether insolvency conditions prevail according to section 17 German Insolvency Statute (InsO) and provide an expert assessment, following IDW S11 regulations, of whether your company is direly threatened or will be threatened in the future by insolvency.
We also lend our professionalism to the insolvency administrator by supporting operative liquidity management. A cardinal rule of insolvency is to know the current liquidity status inside and out and to clearly foresee the possible consequences of actions. We are well-versed in insolvency administrators’ needs, taking on liquidity controlling in close collaboration.
To guarantee smooth proceedings, the insolvency administrator must remain objective, rendering realistic documentation of numbers, dates and facts. We advise in or assume controlling and reporting responsibilities to ensure the flow of information reaches the proper people, both external (i.e. insolvency courts, creditor panels, credit institutes and others involved in proceedings) and internal (i.e. insolvency administrator, management, tax inspectors and auditors). Seamless controlling is indispensable to promptly recognising undesirable developments and launching counteractivities, powerfully reducing the risk of nasty surprises.
Dissolving orders during running proceedings is a very delicate and liability-relevant issue for insolvency administrators. We understand the specific fragility and challenge involved. Therefore, we define and execute a standardised order and release process throughout the entire business, covering all activities from order request to order-to-cash. Our standardised tool can be adapted to the given IT parameters. It is important to train staff members, giving them a better understanding of the particular situation, of the order process and the tool conceived solely for this purpose.
We support the insolvency administration in surmounting all economic hurdles, in generating insolvency plans or reviewing existent plans. Here, we concentrate on the illustrations addressing the company’s financial issues and continuation capacity. The various building blocks of the illustration component reflect on the recovery concept content. (link recovery concept).
Should it serve your best, four of our partners assume interim management responsibilities, including executive positions such as CRO, CEO or CFO. Each and every partner embodies years of experience in crisis management, strengthening and substantiating your recovery concept on a myriad of industry sectors.
Challenging alleged creditor claims serves an equal treatment of creditors while increasing assets. A prerequisite for sifting the facts and circumstances of claims from given data is profound economic knowledge of, among others, accounting processes and analytic methodology. A company cannot afford a lack of capacity and experience in this specific area. We sustain your insolvency administration by investigating claim realities.
Insolvency often entails selling the entire business, individual group companies or partial areas in a share or asset deal. Your insolvency administrator is duty-bound to exploit your bankrupt company’s assets to the creditor’s benefit, thus enhancing total mass. We design and prepare distressed M&A processes, guiding, together with our subsidiary CVM Capital Value Management GmbH, the subsequent transaction. Experienced, expert advisers from both of our businesses consolidate insolvency, crisis and recovery competence with special transaction expertise. The entire M&A process project is navigated by our partners and encompasses all pursuits:
- Drafting appeals for potential investors (teaser, information memorandum, management presentation)
- Identifying and approaching potential investors (strategists and finance investors)
- Organising and accompanying company visits and management presentations
- Managing the data room and navigating Q&A procedures
- Assessing indicative and binding offers
- Supporting the insolvency administrator during investor discussions and sales contract negotiations
We just as competently assist acquiring capital, whether it takes the shape of investor cuts or co-worker equity participation and workforce initiatives. The latter not only strengthens your capital basis, it also keeps your workforce working for their company. We analyse alternative equity participation models and review public funding options for workforce initiatives.