Crisis Management – Turnaround and Bankruptcy Options
Most people believe filing for Bankruptcy provides the best or only option when cash flow becomes too constrained to meet the demands of lenders and other creditors. In reality, options do exist depending on the circumstances.
The largest factor to consider is the severity of the situation. Has your lender increased reporting requirements, placed the enterprise in its special asset department or taken action to reduce your firm’s borrowings? Are vendors calling more frequently and moving you toward cash only terms?
Firms that proactively manage such events significantly increase their chance of survival. Determining which option to choose with respect to insolvency requires the consideration of several factors that define the firm including its: business segments, financial obligations, customers, expenses, and owner intentions. We can help you through this process. Based on your firm’s situation, we help you decide to reorganize or liquidate.
We help you review the benefits and liabilities of both options. If you chose to reorganize, we help you choose between an out-of-court restructure and the protections afforded by a more formal bankruptcy filing under Chapter 11. We help you review these options in light of your firm’s current situation, their costs, protections, difficulties and likely outcomes.
If you choose to liquidate, we help you choose between an orderly liquidation; assignment for the benefit of creditors; or, a Chapter 7 bankruptcy filing. We help you understand the solvency issues involved as well as obligations you may have under covenants entered into with lenders and other creditors—and of course, the cost variances in dealing with each of the options open to you and your enterprise.
Insolvency is a difficult issue to deal with for any enterprise—but we understand that you have options. We help you find the one that you believe meets your needs best.
Proactive Crisis Management
You can transform your business to a revenue-producing asset.
MPL Turnaround Engagements
- Serve you, not your financial institution or the agenda of other constituencies.
- Assist you in defining a new model for your business with all the elements needed to implement it.
- Communicate your plan to your financial institution and other stakeholders seeking their support.
- Remain engaged through out implementation; offering advice on modifications as circumstances change.
- Assist you in managing your relations with your employees, vendors and customers, while we remain in the background.
- Insure that credit for the turnaround goes to those who are responsible; we understand our role as servant in a service based relationship.