VALTUS Management Factory is pleased to support you in the orderly wind-down of a business unit that is no longer competitive. Our Financial Advisory Team manages planning and coordination with the banks, while our Executive Interim Managers take over once the concept moves into the implementation phase.
Strategic shortcomings cannot be resolved through operational measures. In some cases, the liquidation of a company represents the most appropriate solution.
What is meant by a solvent liquidation?
A solvent liquidation is carried out when a company without a viable business model is wound down in an orderly manner outside of insolvency proceedings. The focus is on the termination of operational activities alongside a systematic realisation of assets, with the objective of repaying all liabilities and fulfilling all outstanding contractual obligations.
A particular challenge is that insolvency criteria must not be met at any point throughout the entire liquidation process. Continuous monitoring of liquidity, cash flows and outstanding liabilities is therefore of utmost importance. In addition, a detailed liquidation statement must be prepared on a regular basis, transparently outlining all proceeds from asset realisation, liquidation costs and repayment ratios. In many cases, it is also necessary to negotiate a final waiver with financing banks, whereby they waive part of their claims to enable an orderly settlement outside insolvency proceedings. Only through consistent monitoring, forward-looking financial planning and coordinated agreements with financing partners it can be ensured that the solvent liquidation is conducted in compliance with legal requirements and that a transition into insolvency is avoided.
Solvent liquidation is also commonly referred to as a “wind-down” or “business sunsetting”.
During the wind-down of Unimarkt, Management Factory was involved with interim managers and financial advisory experts. The process included the development of roadmaps, valuation of valuable assets, and support for financial and operational decision-making. The structured approach ensured an orderly liquidation while maximising economic outcomes.
Are you planning a solvent liquidation? Get in touch with us – we will guide you through the entire process.
What are the advantages of solvent liquidation compared to insolvency?
Compared to insolvency proceedings, solvent liquidation offers the advantage that the process can be carried out outside court proceedings and without formally filing for bankruptcy. This allows for more flexible decision-making processes and transactions. While in insolvency proceedings the realisation of assets takes place under insolvency law, solvent liquidation often enables a more value-preserving realisation of assets due to greater temporal flexibility. Furthermore, the public opening of insolvency proceedings is avoided, thereby reducing reputational risks for companies and creditors, and contractual termination or acceleration clauses are often not automatically triggered. As a result, creditors can generally expect higher recovery rates in a solvent liquidation than in insolvency proceedings. However, this is contingent upon no insolvency events occurring throughout the entire process and solvency being maintained at all times.
It is better to downsize than to take on risky large-scale contracts.