Mastering Financial Crisis Prevention
After years of economic expansion, many sectors in Germany are facing multiple crises. Geopolitical instability, inflationary trends, interest rate fluctuations and unpredictable framework conditions are forcing companies to adapt their existing business models or develop new ones, reorganise production factors and supply chains, reinvent markets and, above all, restructure their financing and ensure a supply of liquidity. The number of restructurings and insolvencies has spiralled over the last two years and the solutions are becoming more complex.
Noerr has advised creditors, debtors and investors for many years in situations where companies run into financial difficulties. In many large and complex reorganisations, Noerr has implemented the client’s interests within the existing legal framework. Our specialists from the Restructuring & Insolvency practice group work closely together with the Banking & Finance team, employment and tax lawyers. In addition, our size and high degree of specialisation let us leverage our sector-specific expertise to restructure business models in the most efficient and legally compliant way. Out-of-court corporate reorganisation by negotiation or corporate reorganisation in court proceedings, in particular under the new German Corporate Stabilisation and Restructuring Act (StaRUG), but also in German “protective shield” and debtor-in-possession proceedings, are part and parcel of our daily work.
Key Focus Areas
Financial Restructuring
During times of crisis, it is essential for affected companies to restructure their finances and secure liquidity. Key measures can help restore a company’s financial stability and, in turn, maintain its competitiveness. Structuring the tax effects of equity and debt financing helps achieve these goals.
Our services:
Our restructuring, insolvency and finance experts have many years of experience in structuring debt relief for companies in financial trouble from a legal perspective. Relevant measures include:
- Negotiating and amending syndicated loan agreements
- Debt forgiveness
- Waivers with debtor warrants
- Repurchasing loans and bonds
- Repaying debt financed by equity contributions
- Assuming liabilities
- Subordination agreements and letters of comfort
- Mezzanine instruments
- Debt-to-equity swaps and debt-to-debt swaps
- Capital market measures such as adjusting bond conditions during distressed scenarios and capital increases for restructuring purposes
- Proceedings under the German Corporate Stabilisation and Restructuring Act (StaRUG)
We analyse the situation and look for legal ways to implement the necessary measures. In doing so, we work closely with our colleagues from the Employment & Pensions, Tax, Dispute Resolution and Corporate M&A practice groups.
We support or conduct the negotiations and prepare the necessary documentation. If required, we prepare for court restructuring proceedings and handle the coordination with the relevant courts.
The proceedings under the German Corporate Stabilisation and Restructuring Act (StaRUG) have become an efficient tool which was created by the legislators only a few years ago to implement financial measures necessary to preserve companies, even against the will of individual stakeholders.
Restructuring under company law
Our restructuring team achieves fast and efficient results in exceptional situations. Alongside our colleagues from the Tax, Banking & Finance and Corporate M&A practice groups, we support the transformation and realignment of the companies or groups concerned through restructuring measures under company law.
Our services:
We design the measures identified as necessary in a legally compliant manner, including:
- Ringfencing loss-making, value-destroying business divisions from healthy business divisions
- Carving out low-performing divisions in preparation for distressed M&A transactions
- Devising dual-purpose trust structures
- Designing shareholder structures during reorganisations
- Handling protective shield proceedings and debtor-in-possession proceedings
- Restructuring by transferring the business to a NewCo
Insights
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