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Q. What are 3
options available to any company in financial difficulty?
- 1-3 A.
- Restructuring (CCAA, Div 1)
Orderly Liquidation (CBCA or WURA)
- Liquidation (Bkcy or R’ship)
Q. Name 5 things a monitor or financial advisor can
assist a company with
1-4 A Preparing cash flow forecasts
Arranging for valuations
Preparing a communication plan
Meeting with key stakeholders
Obtaining DIP financing
Q. Name situations where an informal restructuring might be viable
-the company has relatively few creditors, with common interests
-no secured creditors, or the secured creditors support the restructuring
-financial difficulties are identified early
-company has a detailed and comprehensive business restricting plan
-company has a detailed communication plan
-management has credibility with creditors
Q. What can be achieved through informal negotiations/restructuring?
- - Revising lending agreements with secured creditors (compromise of interest, terms, collateral)
-Compromising or deferring amounts owed to unsecured creditors
-Revising lease obligations
-Negotiating with labour unions
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