Planning the rehabilitation of an insolvent company in Georgia

A rehabilitation plan describes how an insolvent company is to continue operating, achieve financial stability and restructure its relations with creditors. Who prepares and submits the plan depends on the proceedings that have been opened and the responsibilities established within them. The duties of the plan preparer, company management, rehabilitation manager and specialist advisers should be clearly recorded, including any required approvals. The plan’s operational measures, financing requirements, liquidity projections, creditor treatment and timetable must be consistent with one another. The underlying revenue, cost, cash-flow and other assumptions must be transparent and verifiable. The impact on employees, contracts and significant assets may also be relevant to the company’s continued operation. The plan is viable only if the proposed measures can realistically be financed and sufficient liquidity is available during implementation. A going-concern forecast should therefore account not only for the expected course of events, but also for adverse developments and possible countermeasures. Deviations from the plan’s assumptions must be identified early so that financing, measures or the timetable can be adjusted in good time.