Read the full article by Gillian Godsil in the Irish Examiner.
Financial distress rarely arrives overnight. Margins erode, cash weakens, and boardroom optimism obscures early signs of danger.
It is in these moments, before insolvency sets in, that expert advisors make the difference between survival and shutdown. Legal and restructuring specialists agree: the earlier the intervention, the wider the recovery options.
Under Irish law, the test for insolvency remains simple: can the company pay its debts as they fall due? If not, directors are required to act in the interests of creditors, not just shareholders.
Red flags and missed signals
There is no single indicator of distress, but signs often compound. Subtle signals include late payments to key suppliers or unexpected tax arrears, and David O'Connor points to behavioural clues.
Companies may only face one major crisis in a generation. We deal with them all the time.
Margins may decline, staff turnover might spike, or creditors go unpaid, but often companies don’t connect the dots. They just hope it’s a bad month.
Assessment and Triage
Our team focuses on operational fit.
We examine whether the company is structured for today’s market, not yesterday’s. You’d be surprised how many firms carry legacy overhead from products or divisions they no longer run. That mismatch often emerges in underused space, bloated wage bills or historic debt that no longer reflects business realities.
You might have €500k in rent but only two-thirds of the space in use. Or staff working legacy roles in departments that have shrunk. That needs to be rebalanced quickly.
Formal Rescue Options
Where viable, companies can enter formal rescue procedures. In Ireland, examinership and the Small Company Administrative Rescue Process (SCARP) dominate. Both give legal protection from creditor action while a survival plan is developed. The difference lies in scale and cost.
We provide the initial report in both examinership and SCARP. That assessment determines whether there is a reasonable chance the company can survive as a going concern. If accepted, creditors are grouped into classes and vote on a rescue plan. Once approved, by court or process adviser, those classes are bound, including dissenters.
Common mistakes
Restructuring is not linear. It can unravel if boards are divided or if directors fall into wishful thinking.
We sometimes see directors continue trading in the hope of a miraculous turnaround,. That usually just deepens the hole.
Sometimes the path is salvage, David O'Connor shares a recent case:
A national food chain entered examinership. We prepared the independent expert report, and the court appointed an examiner. That gave them space to restructure. It protected jobs and kept the brand alive.
Strategic restructuring is about timing, clarity and decisive action. Directors who confront distress early and engage advisors improve their odds of recovery. Those who delay may find that the path to rescue has narrowed or closed entirely. In today’s climate, where cash runs tighter and lender tolerance is thinner, that distinction can be fatal.
Read the full article by Gillian Godsil in the Irish Examiner.
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