Annual report 2022 - Report - Page 17
Restructuring
can minimise
losses and save
jobs
Restructuring can be a solution, whereby
the company is able to survive and
continue its business under changed
conditions. Nicolai Dyhr, partner in
Horten, has extensive experience with
restructuring. Time is an important
factor.
“If a company is insolvent, bankruptcy
will be the natural consequence, because
virtually every failing company has an
unhealthy underlying state that can only
be reversed by active measures –
preferably quickly and often drastically.
Irrespective of who we represent in the
given situation, in order to identify the
management’s genuine options for
action, it is crucial that we get a full and
factual overview of the company as soon
as possible – including creditors,
finances, contracts, employees and other
relevant matters. This is comparable to
an emergency room, where precise
answers to a number of questions must
be found in short order so that the right
patient treatment can be initiated.”
Special motivation
Bankruptcies can be sensitive. It is
unpleasant to have to disclose all the
information and conditions when your
company is no longer viable. In some
cases, the owner’s life work and many
people’s jobs are at stake.
“The central concern in bankruptcy cases
is the creditors’. It is their assets that we
have to save. The primary aim of
restructuring is therefore to find solutions
where creditors are satisfied and get
better cover for their losses than they
would in the event of bankruptcy. But it’s
also about people. Saving as many jobs
as possible is a special motivation. In
some cases, success or failure in saving
the company will markedly impact the
daily lives of hundreds of people,” says
Nicolai Dyhr.
public in the media that we were
undergoing restructuring. I also offered
to become a co-owner of a new entity
together with other investors. We
therefore went to the probate court with
a model that offered creditors really
good coverage, while making it possible
to carry on. However, the given
restructuring proposal was going to take
to too long to attain final approval. The
process up until that day had been fast
and efficient – and the subsequent
process would also have to be so if we
were to succeed,” notes Thor Thorøe.
Life’s work lives on
Quick process
One company that underwent
restructuring in 2022 is the Social
Foodies chain of stores. The business is
based in part on the purchase of
commodities from farmers and producers
in some of the world’s poorest countries,
with equal distribution of earnings to
local suppliers. The company had
accumulated significant debts over a
number of years, and in summer 2022 it
was unable to pay its creditors as
payments became due, and thus became
insolvent. The situation was therefore
critical when the founder of the chain,
Thor Thorøe, contacted Nicolai Dyhr to
initiate restructuring in the form of a
forced composition. There was broad
support among the owners and creditors
to find a solution that allowed operations
to continue and gave creditors
significantly better cover than
bankruptcy would.
“Potential investors from among the
network of Nicolai Dyhr and his
colleagues quickly showed great and
concrete interest in carrying on Social
Foodies and the whole brand we have
built up. Things took off when it became
Horten therefore explored the other
options on the table for carrying on
Social Foodies. These included declaring
bankruptcy, where the subsequent
bidding round would give Thor Thorøe
the opportunity to bid for the company
he had started in 2009, and thus to
continue operations – on new and much
more restricted terms. This was the
option he chose. The bidding round was
then held on fully equal terms between a
number of bidders.
“Seeing your life’s work go bankrupt is
painful in many ways. We had big plans
for expansion and our own central
production facilities, but our company
structure and the people behind it were
not really on side with it. I acquired the
company as the highest bidder, together
with a new co-investor. With the right
restructuring, we now run the company in
the way I had always intended to. We are
currently on target to generate a profit
for the first time in eight years. All six
stores are still intact, as are the around
100 jobs we represent. This makes me
very happy.”
17 Annual Report 2022
Energy costs and inflation
skyrocketed in 2022. Financing
options were also sharply
curtailed, in part due to markedly
higher interest rates. On top of
this, the government’s COVID-19
loan fell due for repayment. This
resulted in a rising number of
bankruptcies. But even if a
company can no longer pay its
bills, bankruptcy does not have to
be the only option.