Energy costs and inflation skyrocketed in 2022. Financing options were also sharply curtailed, in part due to markedly higher interest rates. On top of this, the government’s COVID-19 loan fell due for repayment. This resulted in a rising number of bankruptcies. But even if a company can no longer pay its bills, bankruptcy does not have to be the only option.

Restructuring can be a solution, whereby the company is able to survive and continue its business under changed conditions. Nicolai Dyhr, partner in Horten, has extensive experience with restructuring. Time is an important factor.

“If a company is insolvent, bankruptcy will be the natural consequence, because virtually every failing company has an unhealthy underlying state that can only be reversed by active measures – preferably quickly and often drastically. Irrespective of who we represent in the given situation, in order to identify the management’s genuine options for action, it is crucial that we get a full and factual overview of the company as soon as possible – including creditors, finances, contracts, employees and other relevant matters. This is comparable to an emergency room, where precise answers to a number of questions must be found in short order so that the right patient treatment can be initiated.”

Special motivation

Bankruptcies can be sensitive. It is unpleasant to have to disclose all the information and conditions when your company is no longer viable. In some cases, the owner’s life work and many people’s jobs are at stake.
“The central concern in bankruptcy cases is the creditors’. It is their assets that we have to save. The primary aim of restructuring is therefore to find solutions where creditors are satisfied and get better cover for their losses than they would in the event of bankruptcy. But it’s also about people. Saving as many jobs as possible is a special motivation. In some cases, success or failure in saving the company will markedly impact the daily lives of hundreds of people,” says Nicolai Dyhr.

Quick process

One company that underwent restructuring in 2022 is the Social Foodies chain of stores. The business is based in part on the purchase of commodities from farmers and producers in some of the world’s poorest countries, with equal distribution of earnings to local suppliers. The company had accumulated significant debts over a number of years, and in summer 2022 it was unable to pay its creditors as payments became due, and thus became insolvent. The situation was therefore critical when the founder of the chain, Thor Thorøe, contacted Nicolai Dyhr to initiate restructuring in the form of a forced composition. There was broad support among the owners and creditors to find a solution that allowed operations to continue and gave creditors significantly better cover than bankruptcy would.

“Potential investors from among the network of Nicolai Dyhr and his colleagues quickly showed great and concrete interest in carrying on Social Foodies and the whole brand we have built up. Things took off when it became public in the media that we were undergoing restructuring. I also offered to become a co-owner of a new entity together with other investors. We therefore went to the probate court with a model that offered creditors really good coverage, while making it possible to carry on. However, the given restructuring proposal was going to take to too long to attain final approval. The process up until that day had been fast and efficient – and the subsequent process would also have to be so if we were to succeed,” notes Thor Thorøe.

Life’s work lives on

Horten therefore explored the other options on the table for carrying on Social Foodies. These included declaring bankruptcy, where the subsequent bidding round would give Thor Thorøe the opportunity to bid for the company he had started in 2009, and thus to continue operations – on new and much more restricted terms. This was the option he chose. The bidding round was then held on fully equal terms between a number of bidders.

“Seeing your life’s work go bankrupt is painful in many ways. We had big plans for expansion and our own central production facilities, but our company structure and the people behind it were not really on side with it. I acquired the company as the highest bidder, together with a new co-investor. With the right restructuring, we now run the company in the way I had always intended to. We are currently on target to generate a profit for the first time in eight years. All six stores are still intact, as are the around 100 jobs we represent. This makes me very happy.”


Nicolai Dyhr

Partner (H)