Approaching insolvency
We regard insolvency as an opportunity to develop and grow. Tackling difficult issues, rather than ignoring them, is the way to develop and move forward.

Lofalk assists companies, owners, creditors and investors in implementing strategies and hands-on tactics for addressing impending insolvency or liquidity issues. This might be through a company reorganisation, restructuring of existing debt or by attracting additional debt or equity financing.

Company reorganisation
Swedish law provides a well-functioning procedure for company reorganisations including protection from creditors during the procedure and a possibility to impose mandatory debt restructurings on unsecured creditors. Company reorganisation is normally useful in cases where a company has a viable business model or needs to change direction following a shift in the market, but carries an unsustainable debt load coupled with liquidity drought. Reorganisations often involve the raising of additional debt financing or equity capital, or a subsequent sale of whole or part of the reorganised company.

Lofalk advises creditors as well as debtors in company reorganisations and can act as court-appointed administrator. We also advise investors who intend to provide debt or equity financing to companies under reorganisation.

Voluntary arrangements
Lofalk advises on company reorganisations and debt restructuring by means of voluntary arrangements with creditors. The advantage of a voluntary arrangement is that the procedure is more flexible and can be kept out of public view. However, for practical reasons it must often include only major creditors.

Bankruptcy
Lofalk acts as receiver in bankruptcy in respect of all types of legal entities incorporated under Swedish law. Under Swedish law, the receiver is appointed by the court but the petitioning company or a creditor may request the court to appoint a particular receiver.

Lofalk provides assistance in managing risks and responsibilities for companies that are considering filing for bankruptcy and assists in the preparation and compilation of the necessary documentation.

We also advise creditors intending to petition for bankruptcy orders against debtors, including the preparation of petitions and representation in court, as well as monitoring claims in bankruptcies.

Liquidation
The liquidation of a company entails the dissolution of the legal entity. Liquidation may be voluntary or compulsory, for example when a limited liability company lacks an adequate board of directors or otherwise fails to comply with basic legal requirements.

Lofalk can assist in the liquidation of all types of legal entities.

Lofalk assists in dispute resolution in connection with insolvency matters before Swedish courts as well as arbitration tribunals.

The financing of companies in distress requires, of course, that certain precautions be taken and that protections are in place in case the debtor subsequently becomes insolvent. Bankruptcy and other insolvency-related procedures under Swedish law are largely mandatory and lending to debtors in distress requires knowledge of the legal rules and the special issues relating to this kind of financing. Experience on such matters is a key factor.

Property rights include rules governing the protection which holders of certain rights – such as title, security interests and rights of use – enjoy against third-party claims. Lofalk advises creditors, suppliers or others dealing with parties in distress on mitigating risks associated with counterparty insolvency and maintaining property and security rights.

Lofalk advises on general commercial law issues affecting companies in all areas, predominantly within the firm’s niche.