When is it necessary to restructure

The basic prerequisite of legal restructuring is insolvency, i.e. the state when a company is (temporarily) unable to meet its obligations. A company is insolvent if it is unable to carry out at least two financial obligations towards more than one creditor 30 days overdue . It should be noted that nowadays cash flow problems are not uncommon at all, almost every other business runs into them and often gets into a difficult position by no fault of their own.

Although the company is unable to meet its obligations, is not always necessary to declare a bankruptcy. In case there is a presumption that at least a substantial part of the debtor's business operations will be preserved, and in case restructuring is permitted it may be reasonably expected that the debtor will satisfy a wider range of creditors than in the event of a bankruptcy, it is possible to appoint an administrator with the preparation of a restructuring report and if allowed by court, to begin the restructuring proceedings. Another prerequisite of restructuring is the running of a business, which generates at least some profit or there is a presumption that after restructuring it will generate profit.

The purpose of restructuring is not only to help the debtor kick-start a prospective business again, but also to satisfy its creditors to a greater extent than thay would have been satisfied by a declaration of bankruptcy.

Another, albeit only internal demand for the cooperation of JUDr. Ing. Veronika Škodová's office during restructuring, is mutual trust, providing complete information, responsibility for the performance of duties on both sides, following the administrator's instructions and the fulfillment of mutual obligations and agreements. A necessary prerequisite for successful restructuring is a change in the approach of the company's management and the elimination of errors which could jeopardize the successful operation of the company after the restructuring.