Business Restructuring Lawyers Worldwide.

Think of Business Restructuring as emergency surgery to save the patient, while Bankruptcy (or Liquidation) is often the funeral. Restructuring is a proactive legal process where a lawyer renegotiates contracts and operations to keep the company alive outside of court, preserving value for shareholders. Bankruptcy, specifically Chapter 7 (Liquidation) or Chapter 11 (Reorganization), is a court-mandated process used when the company is legally insolvent; while Chapter 11 allows you to survive, it is incredibly expensive and public. In 2024, US corporate bankruptcy filings surged by roughly 40%, highlighting that waiting too long to restructure often leaves bankruptcy as the only remaining option.

A lawyer acts as a professional buffer between you and angry lenders, replacing emotional pleas with a formal “Forbearance Agreement.” This document legally pauses debt payments for a set period, giving you breathing room to fix cash flow problems without the threat of immediate foreclosure. Lawyers are effective here because they signal to creditors that you are serious about fixing the issue but also prepared to file for bankruptcy protection if pushed too hard—a scenario where unsecured creditors often get nothing. This leverage is crucial in “out-of-court workouts,” which are generally faster and cheaper than formal insolvency proceedings.

A debt-for-equity swap is exactly what it sounds like: your creditors agree to cancel the money you owe them in exchange for shares (ownership) in your company. This is a powerful tool to clean up a balance sheet because it instantly reduces your liabilities and improves cash flow since you no longer have to pay monthly interest. However, it is a “nuclear option” for existing owners because it heavily dilutes your stake; in many major UK restructurings, original shareholders are often left with less than 5% ownership after the swap is complete.

Yes, and this is the most dangerous period for a business owner. Once a company enters the “Zone of Insolvency” (when you can no longer pay bills as they fall due), your legal fiduciary duty shifts from the shareholders to the creditors. If you continue to spend money or take on new debt knowing the business cannot survive—known as “Wrongful Trading” in the UK—you can be held personally liable for those debts. In the UK, the Insolvency Service disqualified over 930 directors in 2023-24, many for failing to protect creditor interests during this critical window.

A “pre-pack” is a strategy where the sale of the business and its assets is negotiated and agreed upon before the formal administrator is even appointed. A lawyer is essential here to draft the sale agreement and ensure the valuation is fair, proving that the deal wasn’t a “stitch-up” to sell the assets back to the old owners at a discount. It is a controversial but effective tool for preserving jobs; in the UK, pre-packs are heavily regulated to ensure transparency, as they allow the business to seamlessly transfer to a new owner (NewCo) typically on the very same day it enters insolvency.

Restructuring often involves layoffs, and a lawyer ensures you follow strict labor laws like the WARN Act in the US (requiring 60 days’ notice for mass layoffs) or TUPE regulations in the UK (protecting employees when a business is sold). Failing to consult employees properly is an expensive mistake; in the UK, failure to consult can result in a “protective award” of up to 90 days’ gross pay per employee, which is a massive liability for a company already short on cash. Legal counsel guides the HR team through the precise timeline of notification and consultation to avoid these automatic penalties.

Distressed M&A involves buying or selling a company that is on the brink of failure, and it requires a specialist lawyer because the timeline is compressed from months to mere days. Unlike a normal deal where you get extensive warranties and indemnities (promises that the business is healthy), distressed assets are sold “as is, where is,” meaning the buyer takes on significant risk. In the US, this is often done through a “Section 363 Sale” in bankruptcy court, which allows assets to be sold “free and clear” of old liens, a complex legal maneuver that a general corporate lawyer will likely not know how to execute correctly.

If creditors are threatening to seize assets or file a “Winding Up Petition” to force you into liquidation, a lawyer can file for an immediate moratorium or “Stay.” In the US, filing for Chapter 11 triggers an “Automatic Stay,” which is a powerful federal court order that instantly stops all collection calls, lawsuits, and foreclosures. This legal shield freezes the battlefield, buying you the critical time needed to negotiate a restructuring plan without the fear of a creditor seizing your bank accounts or locking the doors overnight.