If your company is in a liquidity bottleneck and you either cannot explain the cause or cannot describe a comprehensible way to eliminate the bottleneck, your lenders will see a risk of default. There is then a concrete probability that lenders will call in their loan commitments. To avoid such measures, it is advisable to have a restructuring concept with a going concern forecast drawn up. As a rule, such an offer will at least enable you to agree on a standstill on the part of the lenders until the expert opinion is available.
The respective national associations of the Public Auditors recommend the requirements towards restructuring concepts. As an example, the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, IDW) has developed a guideline for restructuring concepts with a going concern forecast and published it as IDW S6. Make sure that restructuring concepts are explicitly based on this standard, because only then will they be accepted by lenders.
Such IDW S6 reports are not a mere formality. If they are prepared in an action-oriented manner, they are very helpful implementation guidelines that can facilitate the restructuring of companies and significantly increase the probability of successful restructuring. One prerequisite for obtaining such a practice-oriented IDW S6 report is the correct selection of the expert. Do not try to prepare such a report yourself with your management team. This is because it is to be expected that your management team will not be able to approach the investigation of the causes freely enough because it has allowed the crisis situation itself. However, a restructuring report not only requires considerable additional time and an unbiased view from the outside, but also special expertise in crisis management that cannot be expected from your management team. In particular, both insolvency law and labor law as well as the previous case law of the Federal Court of Justice must be taken into account in the IDW S6 report.
The three basic questions in reorganization cases are the question of the need for restructuring, the question of the ability to reorganize and the question of the worthiness of reorganizing.
In addition to restructuring reports in according with IDW S6, going concern forecasts in according with IDW S9 are also justified.
In addition, there is the possibility to prove the existence of reasons for opening insolvency proceedings according toIDW S11.
In each country, the local regulations should be applied.