Corporate Restructuring vs. Bankruptcy: What You Need to Know for Your Struggling Business
Do you own a business? Are you struggling financially and unsure how to get back on track? Instead of filing for bankruptcy, corporate...
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Corporate Debt Help in Ottawa and Throughout Ontario
Economic downturns, market fluctuations and technological disruption can cause even the most robust business to face fiscal instability. At D. & A. MacLeod Company Ltd., we understand what it takes to navigate financial difficulty and can help your organization deal with insolvency or restructuring. With more than 70 years of expertise, we know the intricacies of the many corporate recovery options available to you and your company.
We take a client-focused approach, meaning we’ll work with you to determine the right course of action for your financially struggling business. Contact us today for a free and confidential consultation.
Experienced Licensed Insolvency Trustees
D. & A. MacLeod Company Ltd. has a reputation for excellence across Ontario. Our licensed insolvency trustees are skilled in finding the right solution for your situation or corporate financial distress. We can help you prepare corporate proposals, receivership or bankruptcy documentation depending on your unique circumstances. We can also advise you on other corporate recovery options you may not yet be aware of.
With careful analysis and solid financial planning skills, our trustees can assist you in preparing restructuring solutions to address your current financial problems and protect you from further fiscal misfortune.
We’ll Help You Choose the Right Option For Your Business
Businesses in Ontario face severe financial challenges in industries like manufacturing, energy, transportation, and retail. When your business faces difficult circumstances, a successful financial recovery may require tough decisions.
You can trust D. & A. MacLeod Company Ltd. to provide all the information you need to make the best decision for your circumstances. Whether you file a Division 1 proposal, undergo corporate restructuring or declare corporate insolvency, we’ll help you navigate every step of the process.
Some of your options will include:
Corporate proposals allow a business to resolve its financial situation without declaring bankruptcy. We can help you file a Division 1 proposal and navigate the application process.
Financial restructuring may be the only option to re-establish the stability of your company. Our team has the expertise necessary to help you evaluate the state of your organization and guide you through the restructuring process.
If your company is facing insolvency, it can make meeting your financial obligations more difficult than ever before. A business’ survival depends on so many elements and that can cause financial stress for you.
A company should consider filing for a Division 1 corporate proposal when it faces financial difficulties but still has a viable chance of restructuring and recovering its operations. Here are some situations in which filing for a Division 1 proposal may be appropriate:
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Financial insolvency. When a company is insolvent and unable to meet its financial obligations as they become due, a Division 1 proposal can provide a formal process to negotiate with creditors and restructure debts.
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You want to avoid bankruptcy. Filing a Division 1 proposal provides a bankruptcy alternative. It allows the company to continue its operations while addressing financial difficulties, protecting its reputation and working towards a successful restructuring.
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The business is still feasible. If the business has the potential for recovery and the ability to generate future profits, a Division 1 proposal can provide a framework to restructure operations, implement cost-saving measures and enhance profitability.
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You require legal protection. Initiating a Division 1 proposal triggers a stay of proceedings, which protects the company from creditor actions, such as collection efforts or lawsuits.
Filing a corporate proposal must be done by a licensed insolvency trustee (LIT). D. & A. MacLeod Company Ltd. can help you file a Division 1 proposal and navigate the application process.
Business bankruptcy becomes a viable consideration when companies face overwhelming financial difficulties. Circumstances leading to insolvency include:
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Income loss due to market or economic downturn
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Excessive debt and insufficient cash flow
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Inadequate credit to meet operational requirements
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Reliance on personal credit for business and personal expenses
Corporate insolvency provides a formal legal framework to navigate the insolvency process, ensuring fair treatment of creditors and a structured approach to debt resolution. Moreover, because corporations function as separate legal entities, personal assets and liabilities are protected.
Once a business initiates insolvency proceedings, it gains a stay of proceedings, preventing creditors from taking legal action or initiating collection efforts. This protection allows the company to focus on implementing a recovery plan without the immediate threat of creditor pressure.
Although bankruptcy is typically a last resort, it may prove to be the most suitable choice for many businesses. Insolvency may be the only option after filing a Division 1 proposal that fails to meet the provisions.
Legally, you must use a licensed insolvency trustee (LIT) to file for corporate bankruptcy. We can help you determine if bankruptcy is the best option for you.
A business can benefit from corporate restructuring in various circumstances, including:
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Financial distress. Corporate restructuring can help a company manage excessive debt, cash flow problems or declining profitability.
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Changing market conditions. Corporate restructuring enables companies to realign their strategies, streamline operations and capitalize on emerging opportunities to remain competitive in evolving markets.
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Mergers and acquisitions. In the case of mergers, acquisitions or strategic partnerships, corporate restructuring is needed to reorganize departments and processes.
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Divestment or spin-off. When a company wants to shed non-core assets or divisions, corporate restructuring allows businesses to separate or sell off specific components to improve operational efficiency.
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Technological advancements. Corporate restructuring helps companies navigate changes associated with adopting new technologies.
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Strategic planning. Even if your company isn't in immediate financial distress, you may choose to undergo corporate restructuring as part of your organization's long-term strategic planning.
Whatever situation applies to you, D. & A. MacLeod Company Ltd. can help. We’ve worked with numerous organizations on financial and operational restructuring to help them recover from debt, insolvency, bankruptcy and other issues.
Contact us today for a free and confidential consultation. The Licensed Insolvency Trustees at D. & A. MacLeod Company Ltd. can provide assistance with corporate insolvency, proposals, restructuring, and financial services. We have offices in Ottawa, Smiths Falls, Brockville, Pembroke, Cornwall, Kanata, and Kingston. You can reach us by filling out one of our online forms or calling us directly at 613-236-9111.
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