At a time in which the economy is not functioning as usual, when the future of companies and businesses is uncertain, the employer must examine the state of the business according to the most calculated and objectively considered parameters possible.

The Ten Commandments on the Road to Insolvency Procedures – From the Perspective of Company Owners – according to Adv. Amit Lederman:

Do not waste a good crisis. Use it to find new opportunities.

Do not ‘fall in love’ with the business and don’t wait for the last minute. If you see a problem approaching – bring in an investor or sell the business when you are still appear strong.

Do not sell the business under pressure. Sales must be considered in a calculated way. When feelings are involved – take a ‘non-sentimental’ professional, who will consider the matter for you. This makes it easier to make a cold and objective decision.

Insofar as the company owner acts with integrity and transparency towards the creditors and involved entities, there is great openness during this period to settling with the creditors prior to taking legal procedures for insolvency. Act accordingly, and save yourself a lot of agony and decrease of your business’s value.

In any case, try to leave your ego at home. It’s good for the health of the business and yourself.

Loans must finance profitable activity. If they finance losses – there’s no point in taking them. They only deepen the hole.

Words can be twisted. Numbers – cannot. Stick to the real numbers, so that you don’t lose touch with reality (even if it isn’t a positive reality).

Leave your residential home out of bounds. Don’t encumber it. This is where you move from monetary law to a capital case.

Watch out for friendships in business. There are no friends in business. On judgment day, every person cares about his family and no one else.

It’s not a bad idea to consult with entities specializing in crisis management. They’re just about the last ones in the country who don’t leak whatever they heard in secret conversation.

The writer is Attorney Amit Lederman, partner at the AYR Firm – Amar Reiter Jeanne Shochatovitch & Co., and heads the Insolvency, Creditor Settlement, and Corporate Recovery Department.

The article was published in Law Arena of Calcalist – Israel’s biggest daily financial Newspaper: To the column >>

This column does not replace legal consultation. It must be emphasized that the aforementioned refers to procedures in terms of company owners.

The translation was executed courtesy of Tomedes Translations26