A company facing financial difficulties may undergo a quasi-reorganization to clean up its balance sheet. This process might involve revaluing its fixed assets to current market values and eliminating accumulated deficits by reducing the values of other equity accounts such as additional paid-in capital, thereby setting a fresh financial baseline without legally forming a new company.
During the board meeting, the CFO suggested a quasi-reorganization to address the company's prolonged financial deficits and improve its financial health for future investments.
