How can a seriously troubled company avoid liquidation and accomplish a turnaround?
In today’s environment, speed is of the essence. There are three basic steps: restructure, renegotiate, or merge. You restructure to extend debt repayments or change the debt composition by converting one type of liability to another. You renegotiate agreements with partners or creditors to reflect your changed circumstances. And in many cases, you look to merge with another company that can bring you more financial stability. What is your biggest goal in a restructuring? To establish credibility with creditors and to convince them that patience and cooperation will maximize investment return. Many companies today are besieged with excessive debt. What do you do when things start getting ugly with creditors? As I mentioned, creditors are far more likely in the current environment to want to bail. To convince them not to do so, you need to make sure you have a restructuring plan that benefits all stakeholders, you need to construct a realistic scenario for the company’s future performan
