The professional services sector is in the midst of one of the most challenging and uncertain periods in its history. Increasingly cost conscious clients, reduction in spend from key government providers and a trend towards outsourcing and market consolidation, are severely testing many organisations traditional remuneration structure. This has led many firms to actively undertake cost reduction in order to survive.
In many firms, there is now a real disconnect between the financial objectives of the partners and the financial solvency of the business. Many partners are saddled with onerous personal liabilities and are profoundly affected by any downturn in business, which has major implications for their own personal financial survival. A restructuring of the practice will often also entail significant changes to a partner’s personal circumstances.
In these situations, radical solutions are required to get the business back on track while retaining and motivating key individuals.
Any insolvency and restructuring option needs to be carefully considered in view not only of the corporate structure and underlying direct affect on the principals, but also the likely attitude of the regulatory and professional bodies. There is no ‘one size fits all’ and having to balance a complex regulatory framework and managing key client relationships in order to prevent client loss is a challenge. There are numerous options available and we will tailor a solution that is a better fit for the practice itself and the creditors.
Working Capital and Liquidity
The lack of physical assets makes it, at best, decidedly challenging for professional services businesses to secure bank funding. But cash is key to the survival of any business. We have experience in seeking out the best possible deals and negotiating with lenders on behalf of professionals, alongside assisting with debt collection and conversion of work in progress to ensure a healthy cash flow.
Aside from assisting distressed professional practices we have a strong relationship with many of the leading global law firms. Our forensic experts provide law firms with litigation support services such as e-discovery, asset tracking and due diligence to help unravel complex business crime and build a strong case for their clients. In the realm of corporate investigations where detecting, investigating and preventing multimillion pound crimes requires speed and flexibility, we are able to deploy a team of experts almost immediately.
In situations where either greed or financial pressures have created a breeding ground for fraudulent activity, we assist lenders and the appropriate regulatory bodies in identifying practitioners who have played a role in facilitating fraudulent activities, and in recovering losses.
Related Case Studies
Retail and Distribution
A last-minute solution was able to be found during the self-administration proceedings of the well-known G-fashion Group. Despite the difficult conditions caused by the corona pandemic, an investor was found. While the investor process was ongoing, the textile retailer had to temporarily close its branches due to the lockdown. The contracts for the transferred restructuring, which had already gone through final negotiations, could therefore no longer be concluded as planned. While the management was already preparing to shut down operations and the branches were carrying out clearance sales after being partially opened, an agreement was finally reached with an investment company. Numerous employees have therefore kept their jobs. The PLUTA experts acted as custodians for three companies in the group and supported the proceedings in the interests of the creditors.
Financial Advisor to the Official Committee of Unsecured Creditors of American Airlines in their Chapter 11 bankruptcy proceeding; participated in the assessment of a standalone restructuring vs. a U.S. Airways-led merger; analyzed the recovery to unsecured creditors under both scenarios.
Advising Alitalia the Italian national airline in developing restructuring and turnaround plan, submitting the plan and recapitalisation proposals to the European Commission, and in negotiating EC approval of the US$ 2bn recapitalisation via state aid.