The client
This trading company was acquired by private equity about 5 years ago with minimal shares held by management. The company experienced trading difficulties and was facing insolvency. The private equity investor agreed to exit, restructure their debt and allow management to take control going forward.

Our involvement
We were contacted when insolvency was imminent and urgent investor negotiations were starting, as we had advised on the last transaction, to check if there were any tax issues to consider. We worked quickly and closely with management to advise on the potential tax exposures from releasing investor debt, how to structure the exit and transfer shares to management to achieve the best potential tax outcome for the company and management.

The outcome
The private equity investor was successfully exited and the debt burden restructured which has allowed the company to survive and has continued to trade and return to profitability. A management share incentive scheme is in place to provide equity incentives to the sider management ream.