For financial restructurings, the Denver-based Law Offices of Kevin S. Neiman, pc employs negotiation strategies designed to achieve solutions among debtors, lenders, investors, and other creditors in connection with distressed businesses and individuals. We strongly advocate for attempting to resolve other types of commercial disputes without the time and cost engendered by litigation. To that end, we represent clients when they attempt to resolve commercial disagreements through simple negotiations with opposing counsel and mediation.Call 303.996.8637
Out-of-court restructurings usually involve changing the composition and structure of assets and liabilities of a debtor in financial distress, generally without judicial intervention. The typical, main objectives are promoting efficiency, restoring growth, and minimizing the costs associated with the debtor’s financial difficulties.
Restructuring activities can include:
Sometimes the preference for insolvent businesses or their creditors is to avoid court proceedings to liquidate or reorganize as these types of proceedings, among other things, can be expensive and time-consuming, with no guarantees of what will ultimately happen. To this end, the parties will often informally and consensually attempt to restructure their financial issues or otherwise work out their differences.
In most cases, informal restructuring constitutes an alternative to formal insolvency proceedings. The distinction between formal insolvency proceedings and informal restructuring processes is blurred with the introduction of workouts, which are strengthened by contractual/statutory provisions or by various mechanisms that aim to combine the advantages of formal and informal approaches to address financial problems. By finding points of contact between formal and informal procedures, formality becomes a question of degree.
General preconditions for debt restructuring include a situation of financial difficulty and creditor issues such as financial institutions that are owed meaningful debt and the debtor’s inability to service it.
Before deciding whether an out-of-court restructuring is the most adequate response to financial difficulty, we take into consideration the advantages and disadvantages of informal workouts compared to formal insolvency proceedings. Informal workouts are usually unrelated to any judicial intervention.
The advantages relate to superior flexibility and expediency in dealing with financial difficulty and include:
The main disadvantages of informal workouts as opposed to formal insolvency include:
In order to maximize collateral value and minimize loss and risk, usually debtors need to act quickly and decisively. We understand that financial distress situations can often be resolved most favorably through negotiated solutions. We advise clients on all aspects of workouts and out-of-court restructurings, including: