Our first priority during these challenging times is the health and safety of our employees, our business partners, our clients, and their families. We have limited our discussion of the financial impact of Covid-19, we now feel we need to attack the problems we are seeing head-on.
There are solutions for a struggling business
While it is easy for our business to work from home as we shelter in place or comply with travel restrictions, the toll this is taking on other businesses is frightening. Businesses are struggling to keep their employee base intact, struggling to make vendor payments, struggling to comply with line of credit availability calculations, and struggling to meet term loan covenants. Employees, business managers, business owners, and their lenders are all feeling the impact of the shut downs and as time passes, those impacts grow.
There are solutions!
The government is developing various loan programs and we are staying abreast of those options.
Lenders are challenging their borrowers to come up with creative solutions, and are challenging themselves to do the same.
Owner stakeholders are working with managers, bankers and employees to work through the negative impacts.
We are used to working in crisis situations!
While the Covid-19 situation is unprecedented, the ability to work through difficult times is what we do every day. Call us and talk to us. We can help make sense of the chaos and think through options with you.
There are ways to restructure operations and the financial standing of a company without the cost of a bankruptcy.
Balance sheet restructuring.
Receiverships, state and federal.
Assignment for the benefit of creditors (“ABC”)
Balance sheet restructuring: Lenders, the government, ownership and companies have more creative options that they had even a few weeks ago. The ability of people to work together through these times is encouraging. The same out of court restructuring tools are available to us as before, but there are government programs and patience that did not previously exist.
Receiverships: Receiverships provide the stakeholders a way of operating and a way of selling assets without the expense of a bankruptcy, using the skill and calm leadership of a receiver. We are ready to work in those roles.
ABCs: ABCs also provide a method of operating and selling assets without the expense of a bankruptcy, and the day to day involvement of the courts. Our team members serve as the ABC and use their creative approach to problem solving to serve the stakeholders.
The tool box!
The first tool a stressed environment needs is a cash flow plan. We prepare cash flows every day and are ready to work remotely to develop a cash flow tool and teach people to use them.
The second tool is to work on ideas to improve the cash flow. Outflow reductions: Creative salary and benefit changes, rent delays, vendor payment slow-downs, term debt adjustments, borrowing base calculation temporary changes.
The next tool is to address alternative restructuring options: Balance sheet restructuring, receiverships, and ABCs.
We are not ignoring bankruptcy as a tool, but the cost and time involved in a bankruptcy works in a normal business environment. Today we do not have all the courts operating daily. Business sale options are limited because of difficulties performing the investment banker function remotely.
When should you call us?
We are available to talk through issues you are seeing. You can use us as a sounding board for ideas, problems, etc. We are available 24/7