Turnaround & Restructuring

Act while options remain open.

Corporate crises rarely arise overnight. Markets shift, margins come under pressure and business models lose viability, often long before the effects appear in liquidity forecasts. Recognising these developments early creates time for decisions and preserves options that may disappear as a crisis deepens.

Favoso supports companies before, during and after corporate crises, from early reorientation through stabilisation in an acute crisis to sustainable recovery. We consider commercial, financial, legal and operational factors together, drawing on our own leadership experience and assignments in which we have stabilised and restructured businesses.

Identify crises early. Preserve room for action.

Strong results in the past do not guarantee future stability. What matters is whether the foundations of the company's success remain sound.

We examine business models, earnings, financing, organisation and operational dependencies to identify critical developments and their causes at an early stage. This includes reviewing existing early-warning procedures. The obligation under Section 1 of Germany's StaRUG to monitor developments that threaten a company's continued existence underlines the importance of this responsibility for management.

Not every adverse development calls for restructuring. Timely adjustments to business models, portfolios, costs, processes or financing can open up new prospects. The key is to act while meaningful alternatives remain available.

In an acute crisis, a reliable picture is essential.

When time and liquidity are running short, fundamental questions need prompt and reliable answers: What is the actual financial and commercial position? What caused the crisis? Which liabilities are due, how will liquidity develop, and what needs to happen immediately?

We establish a clear picture of the financial and operational position, develop short-term liquidity and continuation scenarios, and assess potential grounds for insolvency with reference to IDW S 11. This provides a basis for evaluating emergency measures, financing requirements and available options.

Short-term solvency and long-term restructuring viability are different questions. Additional liquidity buys time but does not remove structural causes of losses. Conversely, a convincing turnaround plan is of little use if financing is not secured until it can take effect. Both aspects must be coordinated.

Demonstrate viability. Restore earning power.

A sustainable turnaround must show how a business can recover its competitiveness and profitability and finance its operations over the long term.

We prepare restructuring concepts and expert reports under IDW S 6, assess continuity and strategic options, and connect integrated financial planning with concrete financial and operational measures: reorganising funding structures, negotiating with banks, creditors and investors, and adapting portfolios, capacities, organisation and processes.

We analyse which business areas are viable, where resources are tied up and which changes can deliver real improvements. The decisive question is not only whether a measure works on paper, but whether it can be implemented under actual operating conditions.

Where insolvency is impending, instruments under Germany's StaRUG restructuring framework may be available. We assess financial prerequisites, prepare planning and comparative calculations, and support preparation and coordination with stakeholders. Which tools are appropriate and legally available depends on the particular circumstances.

Restructuring requires leadership, not just plans.

A document cannot turn a business around by itself. Changes must be decided, financed, organised and implemented amid the demands of day-to-day business. Crises create competing priorities between liquidity, customers, delivery reliability, employees and long-term competitiveness.

We know these tasks from direct operational responsibility, from stabilisation after management and corporate crises to reorganising commercial and operational processes, relocating production, restructuring sites and maintaining operations under severe time pressure.

Depending on the mandate, we support management in steering the recovery process or assume operational responsibility ourselves, including as Chief Restructuring Officer (CRO) or in an interim management role. This requires a clear mandate, adequate authority and measurable goals. Measures must be followed through, their effects monitored and necessary decisions secured even where interests conflict.

Difficult consequences are also part of responsibility.

Not every company can survive in its existing form. If analysis shows that business lines are not viable or continued operation of the whole company is impossible, other solutions must be explored: selling parts of the business, orderly closures or transactions in restructuring or insolvency proceedings.

We address such findings openly and develop alternatives consistent with the remaining options. Where a sale or acquisition out of insolvency is appropriate, we can support its commercial preparation, negotiation and execution.

Our benchmark is not survival at any cost, but a commercially sustainable future.

Let us discuss your situation confidentially.

Whether you want to prevent a crisis, prepare a turnaround or are already under acute pressure, an initial conversation will establish whether and how we can help.

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