Analysis, Leadership and Change
for Companies in Transition
Highlights - Troubled Companies
Companies in trouble generally need a lot of help - and fast. These companies may be in default of a loan agreement or a significant contract. Litigation could be mounting. A key customer may have walked out of the door. External factors might require changes in the business model - the way a company addresses a market and makes money. Cash flow is generally going in one general direction - out. Time is of the essence. Experience matters.
When companies face those tough circumstances, they need to turn to someone experienced in restructurings and turnarounds to analyze the situation, determine options, lead negotiations and implement change.
When investors have investments in troubled companies, they need a professional with the ability to see through the fog of words and problems and provide facts and insight.
Restructuring executives think and act differently. They have a high tolerance for stress and can see clearly through the fog. Some of my experience follows.
Public Company - Preserve then Sell
A $200 million publicly-traded company had seen four CFOs in two years. The company was losing money, in default of its bank debt, and had significant cash flow problems. As interim CFO, my assignment was quite simple – keep more cash coming in than was going out so that the company could have an opportunity to sell itself as an operating entity.
I led efforts to negotiate with vendors, extend the bank debt, manage litigation and stabilize cash flows. I also prepared the company to be sold through a chapter 11 bankruptcy proceeding in order to maximize the cash payments to creditors. This preparation included negotiating DIP financing, managing key vendors, filing SEC reports and managing bankruptcy filings.
The sale was accomplished in 45 days, and the bankruptcy was completed in seven months.
Troubled Debt Restructuring
This client lost a key customer and was struggling with too much debt. I analyzed the company’s cash generation ability, defined the debt restructuring options, prepared information for the lender to quantify the lender’s cash recovery options, and assisted the CEO in negotiating a deal with the lender.
Pre-Negotiated Bankruptcy
For this public company, I restructured $218 million of debt with 4 syndicates of banks and insurance lenders through a "pre-negotiated" bankruptcy. The company's bankruptcy plan was confirmed in fewer than 90 days.
Hostile Takeover by Creditor
For this landlord, I managed a hostile takeover of the operations of a $30 million acute care hospital; the tenant filed bankruptcy to hinder the takeover. I guided legal and business strategy. Ultimately, I negotiated a favorable settlement after successful bankruptcy court hearings. The landlord gained complete control and ownership of operations 45 days after the tenant's bankruptcy filing.
