Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Option definition

What does Option mean? An option is a contractual right (but not an obligation) to buy (a call) or sell (a put) specified property, shares or other assets at an agreed or formula-based price (the exercise price), exercisable on a fixed date or within a defined exercise period. The grantor must keep the offer open; the holder may elect to exercise. The term is descriptive and used across commercial contracts, real estate (options to purchase, overage), corporate/share options and financial derivatives. Its content is shaped mainly by contract and property case law, with statutory formalities where land is involved. Key features include: consideration or a premium...

Informal corporate restructuring: entry criteria, options, benefits and drawbacks versus CVAs, schemes of arrangement, Part 26A plans, pre-pack administrations and formal insolvency

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

Entry conditions

For informal restructuring to be an Option (rather than using a formal tool such as a Part 26A restructuring plan), you need:

a viable core business, even if it is currently burdened with too much Debt
early recognition of distress, for example a financial forecast indicating a likely covenant breach
liquidity whilst restructuring is assessed—companies will usually fully draw any existing facilities as soon as they can
support from key stakeholders—typically the secured lenders together with existing shareholders

The cause of the present difficulties is relevant too. Informal restructuring may work where, for example:

an asset or part of the business (eg a legacy factory unit) is loss-making and consuming resources
rapid, acquisition-led growth means newly acquired businesses have not been properly integrated
there is the loss of a major customer
there is the loss of a major supplier
pensions liabilities are high
base costs have risen (eg many airlines were hit by increased fuel costs)

Informal restructuring may not be suitable when:

the business model is outdated...

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Web page updated on 21/05/2026

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