Restructuring (rekonstruktion)
Also known as restructuring, restructuring administrator, compulsory composition, business restructuring, rekonstruktør, tvangsakkord, virksomhedsrekonstruktion
Restructuring is an attempt to save a distressed business through a compulsory composition with creditors or a transfer of the business, instead of bankruptcy.
In practice
Restructuring is the bankruptcy court’s attempt to keep alive a business that cannot pay. Either the debt is written down (a compulsory composition, tvangsakkord), or the sound part of the business is transferred to a new owner.
For you as a creditor, the decisive point is that an adopted composition binds you, even if you voted against it. If the composition gives 30 % recovery, the remaining 70 % of your claim is gone. That is why it is not a matter of indifference whether you turn up and vote.
Against that, a restructuring is often better than the alternative: in a bankruptcy, ordinary unsecured creditors typically get less than under a composition.
Where it commonly goes wrong
- Not turning up. The restructuring is decided by the creditors who take part. Stay away, and others vote on your money.
- Treating it as a bankruptcy. The business lives on. Whether you want to trade with it again afterwards is an entirely separate question — and one that should be decided deliberately.