Pre-trial rehabilitation: tactics. Financial recovery of the enterprise

The financial rehabilitation of the debtor enterprise is a certain system of actions aimed at restoring its solvency. These events are proactive in nature and fully consistent with the goals and interests of the company. Let us further consider in detail how the financial recovery of the enterprise is carried out.

Background

In modern market practice, unfortunately, bankruptcy of enterprises often occurs. This procedure has its own specifics. The procedure for recognizing the insolvency of a company is regulated by law. However, in many cases, liquidation of the company can be avoided. Today bankruptcy of enterprises indicates the shortcomings of their organizational system, the irrational use by such firms of their assets. In such a situation, a deep analysis of the economic activities of companies is of particular importance. Third-party legal entities and citizens, as well as the company itself experiencing certain difficulties with solvency, can apply to the arbitration court to prevent bankruptcy. Pre-trial rehabilitation is performed in three cases:

1. Before the start of the liquidation proceedings, if the company seeks external assistance on its own initiative to overcome the crisis.
2. If the procedure is authorized by a court decision on the proposals received from persons wishing to satisfy the requirements of the debtor company and creditors and fulfill its budgetary obligations.
3. If the company, which filed for arbitration with a statement of insolvency, at the same time offers a resolution plan.

In the second and third cases, the procedure is carried out during the proceedings on the liquidation of the company. At the same time, the terms of rehabilitation should be agreed with the meeting of creditors.

Objectives of the procedure

Remediation is necessary for:

1. Covering current expenses and eliminating the reasons that provoked them.
2. Savings or restoration of solvency and liquidity of the company.
3. Debt reduction of all kinds.
4. Improving the structure of working capital.
5. Formation of resources that are necessary for industrial rehabilitation.

The procedure is aimed at:

1. Improving the organizational system of the company and legal forms of business.
2. Improving the quality of management.
3. Elimination of unproductive production elements.
4. Improving the interaction between company employees.

Pre-trial rehabilitation can be carried out:

1. With the preservation of the existing legal status of the company.
2. With a change in the legal type and legal status of the company.

Event specifics

Industrial and technical pre-trial rehabilitation is associated with updating and modernization of funds involved in the production, improvement of product quality. It also relates to reducing their cost, optimizing the range. Due to the fact that pre-trial rehabilitation usually involves the reduction of excess staff, social events are of particular importance. This, in turn, requires a deliberate termination policy. As part of the procedure, the formation of a financial base for retraining personnel, the proposal and search for alternative places, etc.

Stages

Financial recovery of an enterprise is a complex and to some extent painful process for a company. This procedure requires effective management at each stage.The process includes the following steps:

1. Determining the feasibility and establishing the possibility of its implementation.
2. Justification of the concept.
3. Definition of directions.
4. Shape selection.
5. Selection of a sanatorium.
6. Development and approval of the project.
7. Monitoring

Feasibility and feasibility

At the first stage, in accordance with the results of the diagnosis of insolvency and monitoring the implementation of measures for internal stabilization, a decision is made to conduct rehabilitation. The feasibility of its implementation is due to the inefficiency of the mechanisms used, as a result of which the crisis in the company continues to deepen. The possibility of holding is established by an objective assessment of the way out of an insolvent state and successful subsequent development while providing the company with external assistance at the current stage. If, according to the results of the analysis, it exists, then the initiated pre-trial rehabilitation can be effective.

Justification of the concept

It reflects the ideology of reorganization, establishing its directions and forms. There are two main tactics:

1. Defensive, focused on reducing the volume of investment and operating activities of the company. This ensures a balanced flow of funds at a lower level. This concept involves the attraction of external financing for the restructuring of the company.
2. Offensive, aimed at diversifying the investment and operating activities of the company. It provides an increase in the amount of net financial flow in a future period. This is made possible by increasing the efficiency of economic activity. This concept is implemented by attracting external funds to expand the range of competitive products, accelerated completion of real projects, and access to other markets in the region.

Directions

Their definitions will depend on several factors:

1. The scale of the crisis state of the company. It is established during the diagnostic measures of insolvency.
2. The accepted concept of reorganization.

In accordance with the specified criteria, distinguish directions in the form of:

1. Reorganization.
2. Debt refinancing.

Shape selection

It is carried out in a certain direction, taking into account the characteristics of the crisis. The form of rehabilitation characterizes directly the mechanism by which the main goals of the process are achieved. Debt refinancing allows you to save the company’s business, not to lose the company. As a rule, this form is used to help eliminate insolvency if the crisis is temporary and not catastrophic. The reorganization is carried out with a greater scale and depth of the crisis. This form involves some procedures through which more effective organizational forms of activity are created. Reorganization may lead to loss of control over the company or termination of the company as an independent legal entity. This procedure is carried out in the form of:

1. Affiliations.
2. Separation.
3. Transformations.

In contrast to reorganization, liquidation leads to the complete cessation of the existence of the debtor company and stops its activities. This is what enterprises that initiate their reorganization try to avoid. The purpose of the liquidation procedure is to satisfy the substantiated claims of creditors in order of priority. It, in turn, is established by legislation governing bankruptcy proceedings. To repay the debt, the property of the company is sold, and the funds received are sent to creditors. Reorganization allows you to save funds and company values. However, often a company acquires a different legal status.

Sanator selection

It is carried out in accordance with the selected form of procedure.This stage precedes the development of a business plan in which the sanatorium participates without fail. The specified entity during the reorganization of the debt may be:

1. The owner of the company (including the state agency with the appropriate form of ownership).
2. Creditor.
3. A commercial bank serving the company.

In the event of a restructuring, the sanatorium may be, except for the creditor and the owner:

1. Third party legal entities.
2. The labor collective of the company.

Project preparation

The reorganization business plan acts as the main document defining the goals and the procedure for its implementation. It contains a calculation of the effectiveness of measures. It allows you to evaluate different alternatives. The results of the rehabilitation can be estimated by the size of the additional profit. She in this case is obtained due to the normalization of the company with appropriate assistance. Remediation costs are calculated separately. A special budget is being developed for this. After reviewing the business plan with the calculation of the effectiveness of the measures provided by all interested parties? it is approved and accepted for execution.

Monitoring

It is included in the operational and current control system. Monitoring of the implementation of the measures stipulated in the plan is provided by the relevant division of the company. It is believed that the purpose of the procedure has been achieved if, due to the activities carried out, it was possible to stabilize the economic activities of the company, to avoid recognition of its insolvency and liquidation. The duration of rehabilitation should not be more than 18 months.