Insolvency Process

INITIAL  RISK FACTORS
  • Changing customer demand, process or equipment obsolescence, mounting legacy costs or environmental liabilities, protracted labor disputes, a shifting competitive dynamic, significant litigation – these and other challenges can lead to recurring losses which, if not addressed, will soon place a business or a public entity in extremis.
  • This stage of the insolvency process is where careful analysis and decisive action count for the most.
  • Working closely with our clients, South Bay Law Firm strives to achieve optimal client positioning at this early stage.

CASH SHORTAGE

 

  • Seemingly “manageable” operating losses frequently cascade into chronic shortages of cash – and inability to meet payroll, debt, or other basic operating obligations.

 

  • To survive, management must immediately and effectively communicate with employees, creditors, and other interested parties – the goal is an objective, realistic plan for quickly resolving the cash shortage.

 

  • South Bay Law Firm can provide immediate advice informed by the legal “back-drop” against which restructuring negotiations typically occur.
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INSOLVENCY

  • Predictably, unresolved cash shortages lead to insolvency.

 

  • When new funding or refinancing are not achievable and total assets are worth less than total liabilities, the organization must restructure or arrange for a “going concern” sale. The alternative is liquidation.

 

  • At this juncture, the organization needs to make immediate decisions about its viability and its best insolvency “exit strategy.” It must do so with no margin for error.

 

  • In judicial and non-judicial insolvency proceedings, South Bay Law Firm’s experience permits clients to assess their best tactical options and preserve maximum value – or achieve maximum recovery.