As the effects of the current crisis reverberate throughout the global economy, it’s obvious that not every business or geographical area has been hit equally. The same holds true for companies within a group – and even for business units within a company. While some businesses may flourish, others are struggling.
At all levels of government, measures have been taken to help businesses cope with the financial impact of this pandemic, both for the first and the second wave. These measures span a wide array of areas, but are mostly focused on improving cash-flow in the short to mid-term. Some examples include:
The crisis will, in some cases, result in restructuring, including debt, or other types of turnaround, such as disposing of business units to restore value. All types of restructuring come with their own set of challenges, tax and otherwise, and in many cases vanilla solutions cannot be applied. Negotiating positions and scenarios, time-frames and tactics are all quite out of the ordinary.
On the other side, businesses interested in the merger or acquisition of a company in distress should understand the implications of taking over a company under such circumstances. This way they can make an informed decision, fully aware of all the pros and cons from a tax point of view.