What is the difference between Restructuring and Reorganization? - ProProfs Discuss
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What is the difference between Restructuring and Reorganization?

Asked by C. Gray, Last updated: Jun 01, 2020

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H. Martin

H. Martin, Content Writer, Charlotte

Answered May 20, 2020

The process of restructuring is based on the critical decision of whether to transpose the company or save it by either selling shares of the company to the investors, decreasing services, or taking care of financial debts. Either company hires financial and legal advisors or a new CEO (Chief Executive Officer) to come to a decision. Reorganization means taking control of a bankrupt or financially unstable firm.

It involves negotiations with creditors concerning the financial debt is minimized. Reorganization can also speak to the sale or union of a company that entails an abrupt change in stock. It is a court-supervised formal progression that restructures a company’s finances after it faces bankruptcy or liquidation.

 

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