Director duty
Over-indebtedness (Art. 725 CO)
The interim accounts, measures and court notification the board must handle as the deficit nears.
Over-indebtedness (Art. 725 CO)Financial
restructuring
When the business is sound but the balance sheet or the cash flow is not, the problem can often be fixed by reworking the financing (refinancing, rescheduling, capital measures, creditor negotiation) rather than winding the company down. The whole value depends on timing: act while there are still options and a viable company comes back to stability; wait until the cash has nearly run out and the board’s duties shift to formal steps. We help boards act in time, design the plan, and lead the negotiation, while keeping the directors’ duties in view.
At a glance
Fix the financing, save the business.
Consensual, out of court, while there’s still room.
- For
- Viable but distressed companies
- Levers
- Refinance, reschedule, capital
- With
- Creditor & shareholder agreement
- Before
- Formal proceedings
- Watching
- The board’s duties
The essentials
What financial restructuring is
Financial restructuring returns a viable but distressed company to stability without formal insolvency: refinancing, rescheduling debt, capital measures, and creditor negotiation. The premise is a sound business with an unsound balance sheet or cash flow, fixable by reworking the financing. Done in time, it preserves the value that formal proceedings under the Code of Obligations and the debt-enforcement law would erode. The art is acting while there is still room.
Who this is for
- viable companies under cash-flow or balance-sheet strain;
- boards seeing the first reliable signs of distress;
- companies needing to reschedule or refinance debt;
- shareholders weighing a capital injection or debt conversion.
Where it fits
Restructuring runs alongside the board’s over-indebtedness duties, may need a composition moratorium, or precede distressed M&A.
The levers
The restructuring levers
The right combination depends on whether the problem is liquidity, the balance sheet, or both — and on what creditors and shareholders will support.
| Lever | Addresses |
|---|---|
| Refinancing | Replacing or extending debt on workable terms |
| Rescheduling | Matching payments to real capacity |
| Capital increase | Injecting equity to repair the balance sheet |
| Debt-to-equity | Converting debt to cure over-indebtedness |
These are deployed together as one coordinated plan, not singly, and often with operational measures on the cost base alongside. We design the combination to the company’s actual problem and to the appetite of the creditors and shareholders who must agree to it, because a plan no one will support is no plan.
The diagnosis
Liquidity crisis or balance-sheet crisis
The levers only work once the problem is named correctly. A company can be profitable and still run out of cash, or cash-generative and still over-indebted, and the two call for opposite first moves.
| Liquidity crisis | Balance-sheet crisis | |
|---|---|---|
| The problem | Cash runs out before revenue lands | Liabilities exceed assets |
| First move | Bridge funding, rescheduling | Equity, debt-to-equity, subordination |
| The risk if ignored | Default on a payment due | Art. 725b filing duty |
Most distressed companies have both, in some mix, and treating only the visible one is how restructurings fail. A bridge loan that papers over a balance-sheet hole buys weeks and deepens the eventual loss. When the business is viable but needs protected time to execute, an out-of-court plan gives way to a composition moratorium. We diagnose which crisis is driving before committing to a lever.
How it runs
How it runs
Test viability, design the plan, negotiate the support, and execute, watching the board’s duties throughout.
- Step 1
Test viability
Establishing honestly whether the underlying business is sound and worth restructuring.
- Step 2
Design the plan
Building the combination of refinancing, rescheduling and capital measures the problem needs.
- Step 3
Make it credible
Preparing the figures and the restructuring plan that creditors and shareholders can trust.
- Step 4
Negotiate support
Leading the negotiation, coordinating creditors so they move together rather than one triggering collapse.
- Throughout
Guard the board
Watching the over-indebtedness threshold and the directors’ duties, so the board is protected.
Budget
What it costs
Cost depends on the complexity of the debt, the number of creditors to coordinate and the depth of the measures. It is, however, set against what is at stake: a successful restructuring preserves a business and value that a disorderly collapse would destroy, which makes the advisory cost modest by comparison when the company is genuinely viable.
We scope and quote against the situation. Pricing is on request.
Discuss your situation
What it takes
What a restructuring requires
A restructuring that actually rescues the company rests on:
- a business that is genuinely viable underneath;
- action taken in time, while options remain;
- a credible plan and transparent figures;
- creditors coordinated to move together;
- the board’s duties watched throughout.
Restructuring cannot save a business that isn’t viable
The honest limit of financial restructuring is that it reworks the financing of a sound business. It cannot make an unviable one viable. A company whose problem is not its balance sheet but its underlying economics will not be rescued by rescheduling debt; restructuring it merely delays and deepens the loss, often to the detriment of creditors and the personal exposure of the board. The first question is therefore the hardest and most important: is the business genuinely viable? Where the answer is yes, restructuring can be powerful. Where it is no, the honest course is an orderly exit, and we say so rather than prolong the inevitable at everyone’s expense.
Why Goldblum
The turnaround: how we run it
Testing viability honestly, designing the measures, leading the creditor negotiation and guarding the board is the work this firm does, while there is still room to act.
In time
Acting while options remain
Helping the board move at the first reliable signs of strain, when refinancing and negotiation still work from strength.
Credible
A plan creditors trust
Transparent figures and a coherent plan that coordinate creditors to support a viable company rather than force a collapse.
Protected
The board guarded
The over-indebtedness threshold and the directors’ duties watched throughout, so the restructuring protects the board too.
Related
Around restructuring
Breathing space
Composition moratorium
The court-supervised shelter when a viable company needs protection to reorganise.
Composition moratoriumPreserve value
Distressed M&A
Selling the viable business or assets where restructuring the whole is not the answer.
Distressed M&A
FAQ
Financial restructuring: FAQ
01What is financial restructuring?
Financial restructuring is the set of measures that return a viable but distressed company to stability without formal insolvency proceedings: refinancing, rescheduling debt, capital measures such as a capital increase or a conversion of debt to equity, and negotiation with creditors. The premise is that the underlying business is sound but the balance sheet or the cash flow is not, and the problem can be fixed by reworking the financing rather than winding the company down. Done early enough, it preserves the business, the jobs and the value that formal proceedings would erode. The whole art is acting while there is still room to act.
02When should a company start restructuring?
Earlier than most boards do, at the first reliable signs of strain, not when the cash has nearly run out. The value of financial restructuring depends almost entirely on timing: a company that addresses a tightening cash position or a weakening balance sheet while it still has options can refinance, reschedule and negotiate from a position of relative strength. The same company that waits until it is close to over-indebtedness has fewer options, a weaker hand with creditors, and is approaching the threshold where the board's duties shift to formal steps. The hardest part is recognising the moment; the cost of delay is paid in lost options. We help boards act in time.
03What measures does restructuring use?
The main levers are refinancing, replacing or extending existing debt on workable terms; rescheduling, agreeing new timetables with creditors so payments match the company's real capacity; capital measures, a capital increase to inject equity, or converting debt into equity to repair the balance sheet; and operational measures alongside, where the cost base also needs work. Which combination fits depends on whether the problem is liquidity, the balance sheet, or both, and on what creditors and shareholders will support. The measures are usually deployed together as a coordinated plan rather than singly. We design the combination to the company's actual problem and the appetite of those who must agree to it.
04How does creditor negotiation work?
It rests on a credible plan and honest information. Creditors will consider rescheduling, a partial standstill, or new terms when they are persuaded that doing so recovers more than enforcing would, and that persuasion depends on a realistic restructuring plan, transparent figures, and a process they can trust. A scattergun or opaque approach hardens creditors; a coherent one, presented properly, often finds them willing to support a viable company through a difficult patch rather than force a value-destroying collapse. Coordinating the creditors so they move together, rather than one triggering enforcement that unravels the rest, is much of the work. We build the plan and manage the negotiation.
05What is the difference between this and formal proceedings?
Financial restructuring is consensual and out of court: it relies on agreement with creditors and shareholders and keeps the company out of the formal insolvency system. Formal proceedings (a composition moratorium or bankruptcy) involve the court and a statutory process, with the protection and the constraints that brings. Restructuring aims to fix the problem before that line is crossed, because formal proceedings, while sometimes necessary and protective, carry cost, disruption and value erosion. The two are connected: a restructuring that cannot be agreed may need the breathing space of a moratorium, and the board must watch the over-indebtedness threshold throughout. We work the consensual route first and know when the formal one is needed.
06What if creditors won't agree?
Then the options narrow, and the next step depends on whether the company is still viable. If the business is fundamentally sound but a consensual deal cannot be reached, because creditors are too many, too divided, or unwilling, a court-supervised composition moratorium can provide the breathing space and the legal framework to impose a plan that consensual negotiation could not. If the company is no longer viable, an orderly exit is the honest course. What the board cannot do is carry on regardless once the over-indebtedness threshold is reached, because that exposes it to liability. We are candid about which path the situation actually calls for, rather than pursuing a consensual deal past the point it can work.
07Does the board face personal risk during restructuring?
It can, which is why the board's duties have to be watched throughout. As a company approaches over-indebtedness, Swiss law imposes specific duties on the board (to prepare interim accounts, to take measures, and ultimately to notify the court if the position is not cured), and a board that ignores these or carries on trading while deepening the deficit can be personally liable. Financial restructuring done properly is also the board's protection: it shows the board acting diligently and in time. The risk comes from inaction and delay, not from restructuring. We keep the board's duties in view as part of the work, so the restructuring protects the directors as well as the company.
08Will restructuring damage the company's relationships?
Handled well, far less than a disorderly collapse would. Often the relationships are what the restructuring is protecting. A consensual restructuring, conducted discreetly and with a credible plan, can preserve the company's relationships with its key creditors, suppliers and customers precisely because it avoids the public, value-destroying failure that frightens them all away. The risk to relationships comes mainly from doing it badly: a chaotic, opaque or last-minute process that surprises and alienates stakeholders. A controlled one, in which counterparties are engaged honestly and the company keeps trading, tends to retain the relationships that make the business worth saving. We run it to protect those relationships, not just the balance sheet.
09Do shareholders have to contribute to the restructuring?
Not always, but their support often matters, and sometimes their contribution is part of the answer. A restructuring may rely on shareholders injecting fresh equity, converting their loans to equity, or subordinating their claims, and creditors asked to make concessions will often look to whether the shareholders are also contributing rather than expecting creditors to bear the whole burden. That said, restructurings can also proceed through refinancing and creditor agreement without new shareholder money, depending on the situation. What the shareholders are willing and able to do shapes the plan. We assess the realistic contribution from each side and design a restructuring that the parties who must support it will actually back.
10Can Goldblum lead the restructuring?
Yes. We assess whether the business is genuinely viable, design the combination of refinancing, rescheduling and capital measures the situation needs, build the restructuring plan and the figures that make it credible, and lead the negotiation with creditors and shareholders, coordinating them so a viable company is carried through rather than forced into collapse. Throughout, we keep the board's over-indebtedness duties in view, so the directors are protected, and we are candid when the situation calls for a moratorium or an orderly exit instead. The aim is to return a viable company to stability before formal proceedings become necessary, while there is still room to act.
Is a viable company under financial strain?
Tell us the position honestly. A partner assesses viability, designs the restructuring, and leads the creditor negotiation, while watching the board's duties.