The Company and Director’s Perspective
Previously, traditional small- and medium-sized enterprise (SME) restructuring options available to directors were limited to examinership. However, many directors considered the process too expensive and onerous because of the requirement for Court involvement, so it never received the appropriate amount of engagement required to be a successful solution. Many directors saw liquidation as the only realistic option.
The Small Company Administrative Rescue Process (SCARP) supports directors of SMEs in restructuring their respective companies in an efficient and cost-effective manner, thereby enabling them to continue to trade.
SCARP can be an efficient and expeditious method of restructuring your company’s business.
Small companies must satisfy two of the following three criteria:
Micro companies must satisfy two of the following three criteria:
Directors must prepare a Statement of Affairs and engage a Process Advisor (PA), who must be a qualified to act as a liquidator, to prepare a report confirming that the company has a reasonable prospect of survival.
The PA and directors must prepare a Rescue Plan, which can:
The SCARP process can conclude within 10 weeks if approved by creditors and no objections are filed. If an objection to the Rescue Plan is filed, Court approval is required, and there is no set timeframe for approval.
Early advice is crucial to ensuring your company’s future. Where cash flow or liquidity is a concern, seek advice from a professional advisor at the earliest opportunity.
Review your company financials regularly and ensure you have a robust three-way model, including a profit and loss, balance sheet and cash flow forecasts.
Engage with your creditors
Communication with all your creditors is key to ensure they will support any potential restructure.