As the region continues to brace itself for the possibility of a ‘no deal’ Brexit, there will be some firms that are actively investigating how they may wish to restructure their operations.
The European political landscape will shift in the weeks ahead and we can only await further developments. But there will be some regional SMEs that can no longer play the waiting game. Chris Grocock is a Wilkin Chapman Partner and Head of the Recoveries Department, which incorporates its new Business Solutions’ team and he looks at the support available for those who find themselves at an operational crossroads.
“In a report released earlier this year, as fears of a ‘no deal’ Brexit in the spring were growing, the following statement from Beckie Hart, Regional Director for CBI Yorkshire and Humber, revealed her organisation’s fears. She said: ‘The projected impact on our region’s economy would be devastating and while business will do all it can to reduce some of the worst aspects, a no deal scenario is unmanageable’.
What happens between now and October 31 will depend on the new Prime Minister and his government’s ability to negotiate both at home and in Central Europe.
However, for some firms, time may not be on their side and the ability to hold still ahead of the autumn may not be a luxury they can afford. SMEs, particularly those that rely on exporting, may well be looking at a change in direction involving a significant restructure.
Wilkin Chapman Business Solutions now offers an extension to our significant law offering bringing together a package for businesses, which offers support on all aspects of company restructure or dissolution that can be combined with legal advice in areas of restructuring, succession planning, commercial property, debt recovery, dispute resolution and employment law.
As the obvious uncertainty, which has heightened as 2019 has progressed, continues apace, our message to SMEs is that heads must not be buried in the sand and by tackling issues in good time, the opportunity to change, survive and even grow will be much more likely.
If a business is at the point of closure, then advice on compulsory liquidation may be unavoidable but seeking professional advice can protect the company and stakeholders and result in a smooth and controlled shutdown. Owners can then start to consider a new venture.
However, by seeking advice early a company may be saved by the possibility of entering a Company Voluntary Arrangement (CVA). A CVA may help the company not only to reach agreement with creditors but also run a restructure alongside to put the business on a sound footing once more. Quite simply a CVA is a legally binding agreement with a company’s creditors that allows debts to be paid back via a structured agreement allowing trading to continue.
Could such an arrangement be a good solution for those who have been left struggling in the uncertain times that Brexit has caused but which are confident of their future once the situation is resolved?
The start of any recovery or seeking a resolution in difficult trading times, is to talk to professionals. Everyone in our sector is aware that such conversations can be some of the most difficult to face but once started they will offer solutions, a way forward that may not have been considered before and probably most importantly a lifting of pressure on business owners and directors in troubled times.