Key areas of legal risk in group restructuring projects
Here are some of the legal risks that are most likely to crop up in restructuring projects. In each case we also highlight some ways in which that particular risk can be addressed.
Customer and Supplier Contracts
Risk: Assignment without consent may allow counterparties to terminate early or claim damages.
Reponse: Prioritise key contracts and relationships. Identify which contracts require prior consent or novation to transfer.
Risk: Assignment or sharing of premises without consent may allow the landlord to terminate the lease.
Reponse: Carry out a targeted review of lease documents, and identify which leases require prior consent.
Employment law & industrial relations
Risk: HR restructuring may require the group to inform and/or consult with employee representatives, unions or works councils.
Reponse: Start with a high-level review of relevant employment law requirements. Where necessary, carry out an in-depth analysis of risk issues.
Pensions and Benefits
Risk: Where a final salary scheme is in deficit, a transfer of employees may trigger a funding debt requirement and personal liability for directors.
Reponse: Crucially, identify any risks from pensions early in the process. If negotiations with pension trustees are necessary, we can help the client with these.