Trust, dependability and credibility are usually casualties of a struggling business. We restore these vital business elements through our insightful analysis, disciplined reporting and active communication.
One tool we use is a rolling 13 week cash forecast. Lenders benefit from a reliable, digestible document that ties operating cash flows to a borrowing base and highlights capital needs and their timing. With this in hand the parties can begin have constructive dialog around facts and make more informed decisions.
Through an informed view of the business we help discern options and guide the parties through this. Can the business be fixed? Should the business need to sell or shutter a money losing operation? Are there customers or products that should be shed? How much time and money will it take to get to cash flow break even and stability? Is management willing and able to make the changes needed?
We fill the role of a dispassionate advocate for a solution and help bridge the gap between the parties. Our experience working for all the parties in a restructuring leads us to realistic plans and the higher probability of a successful restructure. Whether you are a creditor or a borrower, you may benefit from Shepherd’s point of view, objectivity and insight.
Businesses need capital to survive and grow. When lenders have decided to limit exposure or exit a credit, borrowers have little time or latitude to get to a source of an assured refinancing. The knowledge we gain through our advisory relationship combined with our experience and constant contact with a variety of banks, non-bank lenders and private equity groups allows us to put sound proposals in front of the right people. This leads to better outcomes and less wasted time and money. When the outcome is critical we deliver.
The facts will guide the selection of Chapter 11, 7 or non-bankruptcy alternatives such as an Assignment for the Benefit of Creditors (‘ABC’), a UCC Article 9 Sale, Receivership or out-of-court wind down.
We’ve worked in numerous Chapter 11 and 7 cases and generally find them (and their associated costs) more suitable for larger, more complex matters. When a Chapter 11 is called for, the Financial Advisory team must have the leadership and presence to give everyone confidence. And it needs to free up management and keep it focused on running the business while the Financial Advisory team manages the myriad reporting and other outside demands of a bankruptcy. Also, the team must have a communications plan to assure customers, employees and vendors and deal with the press. When an asset sale under Section 363 of the Bankruptcy Code is used, we collaborate with Investment Bankers, prospective buyers, counsel and management to get the best deal possible accomplished.
Non-bankruptcy alternatives can offer a speedier, less costly way to execute an agreed upon plan. Many of our clients can’t afford the hard costs of a bankruptcy (especially when owners have provided personal guarantees). And lenders are often in a position to influence the path chosen. But whatever the non-bankruptcy path selected we have worked within many states’ legal regimes and offer comfort and an assured, ethical execution of the plan.
The combination of solid legal counsel and an informed Financial Advisor will help owners choose the path to resolve business debts; a path that is based on strategy and well planned execution.