A practical issue faced by today's ac grid is the rapidly growing power demand on its aging infrastructure. One possibility to maximize the capacity of the existing infrastructure is to refurbish the ac links to operate under dc conditions using modular multilevel converters. In this paper, the idea is applied to restructure an actual medium voltage distribution system. Further, a systematic reconfiguration strategy is proposed to maintain high power delivery capacity even during (n-1) contingency. Contingency analysis is carried out for faults in different system components of the distribution grid. Towards this goal, novel concepts such as reconfigurable switch, dc link converter bypass and flexible dc to ac operational transition are proposed.