Corporate restructuring is the term for reorganizing a company for the purpose of making it more efficient and therefore more profitable. It may involve selling off portions of the company and downsizing human resources. Restructuring may be pursuant to bankruptcy or merger or acquisition, particularly a leveraged buyout by a private equity firm.
The selling of portions of the company, such as a division that is no longer profitable or which has distracted management from its core business, can greatly improve the company's balance sheet. Staff reductions are often accomplished partly through the selling or closing of unprofitable portions of the company and partly by consolidating or outsourcing parts of the company that perform redundant functions (such as payroll, human resources, and training) left over from old acquisitions that were never fully integrated into the parent organization.
Other characteristics of restructuring can include:
Changes in corporate management (usually with golden parachutes)
Sale of under-utilized assets, such as patents or brands
Conversion of corporate structure
Outsourcing of operations such as payroll and technical support to a more efficient third party
Moving of operations such as manufacturing to lower-cost locations
Reorganization of functions such as sales, marketing, and distribution
Renegotiation of labor contracts to reduce overhead
Refinancing of corporate debt to reduce interest payments
A major public relations campaign to reposition the company with consumers
How We Serve Our Clients
No matter the catalyst for your company's need to reorganize, the Wenger law firm can work with you and guide you through a global reorganization that not only optimizes the ultimate tax position of the enterprise but also addresses a multitude of legal and business issues that arise as a result of the restructuring.
