Insolvency and restructuring are among the most crucial disclosure-intensive processes a company will ever face. It is Information you normally share only internally but now you are forced to share it to a broad range of entities and individuals. This information needs to be controlled, managed and disclosed very discreetly. Key stakeholders—creditors, banks, trustees, attorneys, financial advisors and more—expect your information to be organized and easily accessible. You have to manage formidable management challenges like evaluating alternate strategies, negotiating with various stakeholders, implementing new and difficult business plans, and satisfying regulatory and reporting requirements-while continuing to operate your business. And to share this information you need a secured file sharing platform that’s is easy to use as well very secured.
Over the last couple of year, the number of corporate bankruptcies has surged considerably due to financial turmoil caused by the Covid19 pandemic. The size and the number of the companies filing for bankruptcy protection are making insolvency and restructuring processes more complex. One result of this added complexity is that virtual data rooms (VDRs), already in frequent use in M&A transactions, are increasingly being utilized to facilitate bankruptcy and restructuring processes, allowing companies to host and manage thousands of documents online, in an electronic format. Their use also enables businesses to assess the key documents relevant to a restructuring process in a secure environment faster.
DocullyVDR the best virtual deal room services are designed to have the flexibility to streamline and manage the various requirements of the insolvency and restructuring process. The following describes how our secure virtual data room manage an insolvency process successfully:
By giving stakeholders pre-defined access rights with the ability to review information on an ongoing basis, the administrative burden on the client is dramatically reduced. Furthermore, 24/7 access and automated notification keep all stakeholders well informed with minimal extra cost to the client.
Corporate Client: Our secured file sharing platform allows corporate staff to upload ongoing financial and operational information while at their desks in various office locations. Senior personnel then need to only vet the information online, before releasing it to outside stakeholders.
Creditors: Various creditors are able to access reports and sign-off on releases in the law firm’s virtual data room.
DIP Lender: Debtor in Possession documents can be included in the negotiated and finalized agreements managed in the secure virtual deal room.
Court Appointed Monitor: The appointed court monitor can have a comprehensive view of the proceedings and post it’s weekly reports for authorized access online.
Court Orders: All relevant litigation documents can be posted in the secure data storage platform.
Sale Process: Online Due Diligence can be enabled and the auctioning off of the corporation’s assets to multiple bidders is possible. Definitive asset purchase agreements, related schedules, creditor consents and approvals can all be negotiated and executed through the secure virtual data room.
Closing Deliveries: All closing documents and conditions can be negotiated and executed.
Post-Closing Matters: Post-closing matters, including articles of amendment, resignation letters, distribution of the proceeds of sale and other post-closing filings, can also be managed in the virtual deal room.
The ability to undertake a full text search and to communicate easily with other parties can actively assist in speeding up the due diligence period, and consequently galvanises the whole bankruptcy process. In addition, a streamlined, well-organised environment enables the people involved to concentrate on restructuring the business, rather than wasting time in other areas. Secure virtual data room are also useful tools for reducing the time, and therefore costs associated with contract reviews. They can also present new opportunities by opening investment channels, by offering online access to their information, which expands the locations and number of potential participants, clients can expand their lender, investor and buyer universe without added expense.
The extent of the financial crisis and the number of distressed companies that have been affected in the past two years has increased the need to respond quickly, efficiently and cheaply to the challenges that arise. A secure virtual data room gives those companies a framework in which they can do that without distracting them from their priorities. From that perspective, VDRs provide welcome benefits amid the cost and confusion of the current global turmoil in cases of insolvency and restructuring of companies.
The DocullyVDR team is a provider of a new generation secure data sharing platform designed for businesses. The team has extensive experience in working with document sharing platforms and has been assisting the Virtual Data Room community since 2019 by providing users with free information.