The most successful restructures and turnarounds all have one thing in common – meticulous planning. Without this, companies are flying blind and often leave themselves vulnerable to the inevitable shocks that come with distressed situations.
A good contingency plan covers areas such as cash flow, options, risks, opportunities, and stakeholder communication plans. It also provides appropriate guardrails to keep the plan’s execution on track and ensure a company can emerge from distress as quickly as possible, with its reputation and relationships intact.
Deloitte’s specialists combine technical and sector expertise with advanced data analytics and visualisation tools to help clients understand likely financial outcomes and recovery prospects.
This approach means we can provide sophisticated options analyses and Plan B scenarios to help facilitate consensus-based deals or restructuring arrangements, even in complex scenarios involving multiple lenders.
If a consensual route is not possible, our team’s specialist knowledge of insolvency legislation covers all the options for undertaking a formal insolvency process. Options might include administrations, liquidations, trustee appointments and/or bankruptcy services.
Through the recovery or insolvency process, we:
- identify stakeholders and manage key concerns throughout the restructuring
- involve Deloitte’s wider advisory teams (including tax and legal advisors) to assess the full suite of options and then devise detailed fallback planning
- analyse the viability and use of insolvency-based solutions, if appropriate, and work with companies to implement them.
We have a proven track record of using contingency planning and insolvency to add value in difficult situations for all stakeholders.
- Lenders: we typically assess security and negotiation leverage to understand contingency options, which can often include enforcement
- Corporates: we can help identify options, including developing defensive plans to counter potential action from other stakeholders. Our solutions can also help directors demonstrate that they are acting responsibly, and assist with ‘going concern’ and other statutory duties
- Investors: we can help to identify downside scenarios to illustrate what a worst-case outcome might look like. We can also undertake options analysis to assist with credit-making decisions and help assess potential returns on exit
- Other stakeholders, such as pension schemes and regulatory bodies: we can assess the leverage each party has in the restructuring and how this can be used to drive an optimal outcome.