How can I protect my company from insolvency?
November 20, 2023 | 80,00 EUR | answered by Renate Germer
Dear lawyer,
My name is Alice Baumgart and I run a medium-sized company in the IT services sector. In recent months, our revenues have significantly decreased due to the economic situation, and we are having difficulty covering our ongoing expenses. I am very concerned that my company could slide into insolvency if the situation does not improve soon.
Currently, we are in a precarious situation as we already have arrears in payments to suppliers and some of our employees are experiencing delays in receiving their salaries. The company's liquidity is severely endangered and I fear that we will soon be unable to meet our obligations.
As I am very committed to saving my company, I would like to know what measures I can take to protect it from insolvency. Are there any legal options to prevent or at least delay the impending insolvency? What steps should I, as the managing director, take now to save the company and stabilize it in the long term?
I thank you in advance for your support and look forward to your expert advice.
Kind regards,
Alice Baumgart
Dear Mrs. Baumgart,
Thank you for your inquiry. The situation your company is facing is certainly very concerning, but it is good that you are seeking solutions early on to avoid insolvency. There are indeed legal options available to prevent or at least delay imminent insolvency.
First and foremost, it is important that you conduct a thorough analysis of your company's financial situation. This includes reviewing all income and expenses, creating a liquidity plan, and identifying opportunities for cost savings. It may also be beneficial to work with an auditor or tax consultant to get a well-founded assessment of the situation.
One initial step to avoid insolvency could be negotiating payment deferrals with suppliers and creditors. Often, they are willing to make flexible payment arrangements to prevent insolvency. It may also be helpful to speak with the house bank and discuss potential financing solutions, such as a loan or guarantee.
Furthermore, restructuring the company could be considered. This could involve shutting down unprofitable business areas or optimizing processes to reduce costs. Exploring new business areas or cooperation opportunities could also be an option to increase revenues in the long term.
It is important that you, as the managing director, take proactive action and do not hesitate when it comes to saving your company. Do not hesitate to seek professional help and consult experienced lawyers, business consultants, or insolvency experts.
I hope this information was helpful to you. If you have any further questions or need assistance with implementing the mentioned measures, I am at your disposal.
Sincerely,
Renate Germer, Attorney specializing in commercial law
