A changing market, falling demand or too low a profit margin? There are dozens of reasons why a business can go bankrupt.
This is how thousands of companies that saw their revenue (mostly) disappear got through the coronapandemic with the help of government support. We are now seeing a slowing of the bankruptcy curve.
Some entrepreneurs decide to make a relaunch after bankruptcy, which can be a type of business acquisition. What exactly is it and how can you achieve it?
What is a relaunch?
A relaunch of your business involves continuing part or all of your business after bankruptcy. This often generates misunderstanding from employees and creditors, because why should your business go bankrupt? Surely this leaves your employees out in the cold? If your company goes bankrupt, a trustee comes into the picture. This ensures the smooth handling of the bankruptcy.
Among other things, the trustee looks after the interests of the creditors. To this end, he wants to realize the highest possible proceeds from the company. Experience shows that the proceeds from a relaunch are often higher than in a bankruptcy without a relaunch. Moreover, it is often still possible for some employees to return to employment, so these interests are also safeguarded.
When do you make a relaunch?
You can only make a relaunch as a legal entity, such as an NV or a BV, and you must also expressly make the wish for a relaunch known to the trustee. However, as a sole proprietorship, where you are personally liable in bankruptcy, a relaunch is impossible.
If part or all of the organization still has sufficient perspective for the future, but due to unfortunate circumstances the bankruptcy is a fact, you often have the possibility for a clean slate.
What should you pay attention to when making a relaunch?
Look before you leap. You file for bankruptcy because structural problems mean that your business can no longer keep its head above water financially. If you are considering a relaunch, address these structural problems immediately and drastically, because a relaunch will not solve these problems all at once.
Technical bankruptcy gives entrepreneurs the opportunity to restart a new business without the ongoing employment contracts. If you want to restart part of your business without bankruptcy, you are required by law to transfer existing labor contracts into your new business.
What you should definitely not do with a relaunch
Don't play hide-and-seek. Inform your employees, customers and suppliers and tell them the truth, however difficult that may be. And also tell them what you plan to improve upon the relaunch. That way, you make sure that you take responsibility for your actions and that also inspires confidence in your commitment and course of action.
If you see your bankruptcy coming well in advance and are interested in a relaunch, wait for the declaration of bankruptcy before you initiate a relaunch. Otherwise you run the risk that the interests of the old and the new company conflict with each other and this can cause a lot of trouble.
