Corporate and financial restructuring options in New York
As the holidays approach, New Yorkers are preparing to cheer in the New Year, anxious to say good-bye to the financial woes of 2013. The economy continues to show signs of improvement and New York businesses are preparing for higher profitability in the years ahead.
According to Experian – one of the three main credit bureaus in the United States -, New York had the lowest business bankruptcy rate in the nation during the second quarter of 2013. While financial woes still plague many companies in the state, corporate and financial restructuring offers solutions that keep many businesses running strong.
Common reasons for restructuring
When a business is going through a restructuring process, many may think it is due to overwhelming debt issues. However, there are many additional reasons that corporate restructuring may be advisable or necessary. Business owners may wish to implement strategic or visionary changes or improve efficiencies within their companies for the following reasons:
- Corporate resizing: Lower production demand, more efficient technologies or cost-cutting measures can cause a need for reducing the size of the business workforce. Fewer employees may necessitate fewer managers and, thus, a different reporting and communication structure. On the other hand, a small business that is booming may not have the infrastructure it needs to handle the expansion.
- Debt restructuring: A company need not be in distress to take advantage of the benefits offered by financial restructuring. Loan refinancing or restructuring can reduce a business’s debt load, thereby averting future financial difficulties.
- Management style: Death or retirement of a key player in a corporation may offer the opportunity for the business to reinvent its management style. New management techniques seek to empower employees, freeing up managers to concentrate on efficiencies and strategic planning within their businesses.
- Changing nature of business: The very nature of a business may change over time, necessitating a revamping of its business model in order to stay in the game. Developing new products, connecting with international markets or redesigning the services offered might require a restructuring.
- Organizational reshuffling: Organizational changes may allow the business to diversify its interests, creating a broader base from which to grow. Such changes may also allow the company to take advantage of tax breaks it could not previously enjoy.
- Risk management: As companies expand or downsize, changing roles within the corporate structure may leave holes in quality assurance and litigation management departments. Identifying and closing those gaps may require a new corporate structure in order to protect the company and its stockholders.
The most important aspect of restructuring is to consult an experienced corporate and business law attorney. A New York lawyer knowledgeable about corporate bankruptcy, financial restructuring and commercial litigation can help keep your business on track.