Ever since September 2008, when the world economy was hit by the worst crisis since the 1930s, people have been made painfully aware that economic recession and decline are no longer a thing of the past. What’s more, the pace of technological innovation is speeding up to such an extent that yesterday’s successful business model is likely to become tomorrow’s lame duck. Examples of such rapid demises abound in the music industry (where LPs were superseded by CDs, and where Napster was replaced by i-Tunes, which has now given way to Spotify), telecoms (from Nokia to Apple) and photography (witness the decline of the former giant, Kodak). For this reason, it is important to be prepared for changing markets and to take action quickly if need be. After all, what’s the point of carrying an umbrella if you don’t use it when it rains?
The same applies if you find yourself running into financial difficulties: you need to act quickly and effectively, asking yourself questions such as: Is your business model still appropriate? Have your problems been caused by the state of the economy or are they more structural in nature? Do you have access to enough credit? Are you dependent on short-term loans? Do you have too many people on your payroll who are not doing enough work? What’s the state of your relationship with key players such as banks and suppliers?
If you don’t act swiftly, you may find yourself forced to take draconian measures in the end, such as a suspension of payments or bankruptcy proceedings followed by the relaunch of your business. If you don’t take swift action or the right action, you will lose control of your own destiny and it will be either a bank or one of your suppliers who decides what happens to your business.
Our lawyers are there to help in emergencies. They know not just what needs to be done, but when and where. As the members of our Insolvency Practice Group regularly act as receivers in bankruptcies, they are ideally placed to help you prevent your company from being declared bankrupt or going into liquidation.