Corporate Debt Restructuring – Case Study
February 4, 2010
Corporate Debt Restructuring
The Principals of Revitalization Partners bring extensive experience in working with equity investors and lenders to facilitate corporate debt restructuring.
We evaluating the investor’s & lender’s exposure and help the company propose the proper actions necessary for corporate debt restructuring and improving their financial and operating position.
We understand what is important to lenders and help create and present a corporate debt restructuring plan that is acceptable to your lenders.
We leverage our management, investment and financial experience to provide our clients with an in-depth understanding of the issues involved in a corporate debt restructuring for their company.
Each of the Principals brings due diligence experience that transcends financial due diligence and enables us to identify operational flaws and corporate debt restructuring opportunities that are not readily detected by financial analysts. Our services include:
- Corporate Debt Restructuring
- Reviewing the feasibility of management’s business plan and assessing the company’s industry and market
- Evaluating key personnel
- Evaluating loan collateral, especially intellectual property
- Preparing a liquidation analysis
- Monitoring implementation of strategic initiatives
- Evaluating M&A prospects from a financial and operations perspective
This is a Case Study that involved corporate debt restructuring:
Description:
This is a privately owned visual presentation company where revenue had declined significantly and it was not profitable. The debt load had risen to a level that far surpassed the company’s ability to repay it. The company was also administratively supporting three other related companies without compensation. Corporate debt restructuring was needed immediately.
Challenge:
Immediately reduce operating expenses, revamp the sales and operational management, reduce the debt load through corporate debt restructuring and return the company to profitability.
Results:
Corporate Debt Restructuring involved us reducing the long term debt load from $11 Million to $1 Million by renegotiating the debt with the debt holders.
- The sales function was reorganized and streamlined.
- The commission structure was restructured and focused on selling the company’s more profitable product lines.
- Expenses were reduced by restructuring the administrative functions so that they would only support the existing company.
Corporate Debt Restructuring may seem like a daunting and embarrassing task, but your lenders will be most appreciative if you start your corporate debt restructuring program early. Corporate Debt Restructuring.
Corporate Debt Restructuring, done properly, will bring immediate financial relief to your company and an effective corporate debt restructuring program will be viewed as actions of capable and responsible management. Corporate Debt Restructuring.
We found that corporate debt restructuring programs are most often well received both internally and externally. Corporate debt restructuring is actually a straightforward process and when implemented properly, your corporate debt restructuring plan will save you a great deal of aggravation and angst.
The Company returned to profitability with twelve months resulting in a successful sale thanks to Corporate Debt Restructuring.
Corporate Debt Restructuring.
Law Suit Filed: SLM, Sallie Mae Faces Class Action Over Unauthorized Calls to Borrowers
February 3, 2010
SLM, Sallie Mae Faces Class Action Over Unauthorized Calls to Borrowers
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Law Suit Filed: SLM, Sallie Mae Faces Class Action Over Unauthorized Calls to Borrowers
Settlement: Workers Win $600,00 Settlement in Overtime Lawsuit
February 2, 2010
Workers Win $600,00 Settlement in Overtime Lawsuit
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Settlement: Workers Win $600,00 Settlement in Overtime Lawsuit
How To Select An Interim CEO
February 1, 2010
Interim CEO
Even the most successfully managed businesses can sometimes find themselves in a situation when they get into trouble and need to bring in an Interim CEO.
Often, realistic and savvy business people underestimate the difficult challenges of successfully managing a troubled business.
In most instances, changes in both the internal and external business environments that bring a company to a crisis situation do not happen overnight. Typically, many subtle warnings occur well before the business crisis occurs.
Initially, pricing leverage shifts heavily to the customer, margins are squeezed, a key customer duel sources its needs with a competitor, internal business processes begin to falter, underlying assumptions on optimistic financial budgets are unrealistic or sales personnel lower pricing to meet the competition. Generally, as sales decrease or pricing decreases the situation worsens. An Interim CEO has experience dealing and fixing all of these problems and more.
The stories are all different, but always remarkably similar.
An Interim CEO will typically and immediately manage cash very closely. In most situations, management hopes begin to hinge on increased volume, a strengthened economy or a competitor’s failure. The independent auditors “qualify” their opinion on the company’s financial statements, citing “going concern” considerations. When you reach this situation, a fix is needed immediately and this is what an Interim CEO does best.
As a crisis deepens, liquidity often becomes a day-to-day consideration. Payments to vendors are stretched. Financial covenants under existing financing facilities are breached. The industry rumor mill questions the company’s continued viability. Lenders and customers grow anxious about the company’s future. Employee morale begins to falter. Key employees leave for greener pastures.
In today’s business climate, the Interim CEO that can focus on rapidly creating “internal liquidity” can have a significant impact on the ultimate outcome of the crisis.
Like a deer caught in the headlights of an oncoming car, most incumbent management teams suffer some degree of decision-making paralysis. They have never been down this road. In extreme cases, senior management retreats into a “bunker” and refuses to face reality. Ultimately, the company, its shareholders, employees and creditors all suffer. Selecting an experienced Interim CEO is typically the first step in the turnaround.
The actions of an Interim CEO to save a troubled company are usually prompt and decisive. The window of opportunity is often limited and the task at hand is generally difficult. All situations are unique and generally require difficult decisions.
The Interim CEO management skills that are often required to deal effectively with a crisis situation are usually different than what is required when the company is profitable and thriving … and this is what an Interim CEO brings to the situation. The Interim CEO does not have existing friendships and doesn’t generally have to worry about hurting anyone’s feelings. Without a company “history” to protect … the Interim CEO is there to solve a crisis and is only accountable to the success of the implemented solutions.
Interim CEO
It is difficult for senior management to accept that different skills and outside help are necessary in a crisis situation. Even sophisticated businessmen decide not to hire an Interim CEO where they are necessary.
They often conclude that there is no money to pay an Interim CEO. In many of these situations, the reality is they cannot afford NOT to hire an Interim CEO The sooner the company accepts the reality of the crisis and seeks help from an Interim CEO, the more likely effective help can be provided.
Much like oncologists, the Interim CEO often gets a client visits after it is too late. In those situations, the troubled business becomes a broken business and it is ultimately liquidated – all stakeholders are harmed.
A high-quality Interim CEO will bring specialized crisis management experience and an objective, unemotional assessment of the reality of the situation, outlook and potential solutions, if any.
In many situations, an experienced Interim CEO is able to alter the status quo and renew employee and stakeholder expectations with fresh, disciplined processes to address the ills of a financially distressed business.
Once the decision to hire an Interim CEO is made, business people usually view industry experience as the most important factor. While specific industry experience may in limited circumstances be helpful, this qualification should generally rank low on the list of decision making criteria.
Generally, the Company’s officers, directors, managers and employees possess all the needed industry experience. An Interim CEO without preconceived notions about the industry often adds more value by addressing and considering all viable alternatives, not just those which have been employed in one particular industry.
In this fashion, the Interim CEO brings something unique to the situation – - a fresh perspective.
Turnaround efforts are often directed at fixing underlying functional operational problems such as production inefficiencies, organizational structure, sales policies, product cost, etc. In other situations, the immediate concern is maintaining the operational and financial integrity of the business intact through tight cash management and cash forecasting, negotiations with vendors, lenders, unions and other stakeholders, or instituting emergency cost reduction/ cash saving measures. With other companies many of these issues must be addressed simultaneously.
There are major differences between the activities and expected outcome of fixing the operational aspects of the business and fixing the overall capital structure. They both generally involve different skill sets.
Not all Interim CEOs who consult and advise with troubled companies possess all the skills and experience to deal effectively with all of the necessary issues.
While some Interim CEOs are adept at both fixing underlying operational problems and managing a severe crisis, other consultants skills, experience are only suited for specific operational issues (e.g., supply chain management, logistics, production efficiency, etc.)
In many instances, it is advisable to hire an Interim CEO from a turnaround firm with which has different individuals addressing different areas, thereby maximizing the strengths of all of the professionals.
When a business’s survival is on the line, it is extremely important to select an Interim CEO that can alter the outcome. Find a turnaround professional that has actually “been there and done that,” i.e., actually turned around troubled businesses and/or restructured their capital structures.
Conduct an extensive interview process to assess both qualifications and personal comfort with the individuals.
Once the decision is made, provide the Interim CEO with your full support to get the job done. Do not let egos block the path to a recovery. The stakes are too high.
Law Suit Filed: Fifth Third Bancorp Faces Overdraft Class Action
February 1, 2010
Fifth Third Bancorp Faces Overdraft Class Action
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Law Suit Filed: Fifth Third Bancorp Faces Overdraft Class Action
