Фото: Financial rehabilitation of the enterprise – what is it and how to carry it out?

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Lawyer in the practice of bankruptcy of individuals and individual entrepreneurs. Specializes in write-off of bank and MFI loans through the bankruptcy procedure.

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Financial rehabilitation of the enterprise – what is it and how to carry it out?

Reading time: 3 min.

Most businesses often face financial challenges that can threaten their existence. The economic crisis, increased competition and other factors can significantly shake the financial stability of even successful companies. In such difficult conditions, financial rehabilitation comes to the rescue.

 

What is financial rehabilitation?

Financial rehabilitation is a complex process of recovery of an enterprise that has found itself in a difficult financial situation. It includes a number of targeted actions designed to solve three main tasks:

  • Recovery of solvency

This is the return of the ability to timely fulfill financial obligations to all creditors, including suppliers, employees and the state.

  • General improvement of financial condition

Strengthening the financial position of the enterprise through:

  • Debt reduction
  • Cost optimization
  • Effective asset/liability management
  • Increasing profitability

The purpose of this is to achieve a stable financial condition for a confident market position.

  • Creating a basis for future development

Sanitation should also lay the foundation for further business growth and development. This may include modernization of production, development of new markets, introduction of innovations, etc.

Assistance of lawyers in carrying out financial rehabilitation

Types of financial rehabilitation

The legislation establishes two main approaches to the financial rehabilitation of an enterprise:

  • Internal industrial sanitation

This is the process of financial recovery, which the company carries out on its own, without the involvement of external assistance. This approach relies on the company's internal resources and capabilities.

  • External sanitation

This type of rehabilitation involves the active involvement of external participants in the process of financial rehabilitation of the enterprise.

Importantly! The choice between internal and external rehabilitation depends on the depth of the financial crisis, the company's available resources and the willingness of external parties to participate in the rehabilitation process.

 

How is financial rehabilitation carried out?

The process of financial rehabilitation is regulated by the Law "On Bankruptcy" and includes several consecutive stages:

  • Initiation of rehabilitation: making a decision about the need to improve the enterprise.
  • Development of a remediation plan: formulation of a recovery strategy, including condition analysis, measures, timelines, forecasts and resources.
  • Coordination with creditors: submission and approval of the plan by creditors.
  • Implementation of measures: implementation of planned restructuring, optimization and investment attraction actions.
  • Evaluation of results: analysis of the achievement of rehabilitation goals and decision-making on further actions.

Financial rehabilitation of the enterprise

Advantages of financial rehabilitation in comparison

  • Preservation of the enterprise: continuation of activity without liquidation.
  • Creditor protection: more likely to repay debts.
  • Reputation restoration: maintaining the trust of partners and customers.
  • Economic efficiency:
  • Preservation of asset value
  • Continuation of profit
  • Avoidance of bankruptcy procedure costs
  • Social Responsibility: Demonstrating a willingness to solve problems.

Rehabilitation preserves the economic potential, protects the interests of the parties and creates conditions for the recovery of the enterprise.

The need for legal assistance

It is important to emphasize that the process of financial rehabilitation is a complex legal and economic procedure that requires careful planning and professional support. Without proper support, the enterprise can face numerous risks that can nullify all efforts.

By turning to the law firm "Prykhodko and Partners", you will receive reliable protection entrusted with defending your interests and achieving a positive result.

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Lawyer in the practice of bankruptcy of individuals and individual entrepreneurs. Specializes in write-off of bank and MFI loans through the bankruptcy procedure.

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