INFORMAL WORKOUTS AND TURNAROUNDS
Initially, we would explore whether or not an informal workout or turnaround is viable given your financial circumstances.
It is important to recognize the early warning signs of financial difficulty. Informal workouts have a greater chance of succeeding if they are implemented when your business is viable and before your financial problems become too serious. It is critical that your creditors do not lose confidence in your business.
We can assist you in reviewing your business and recommend changes to improve operating efficiencies, reduce overhead and improve your cash flow. We can assist you in preparing financial projections that are credible and a turnaround plan that is viable. We can assist in negotiating a forbearance agreement with your bank that will allow you to execute your turnaround plan. We can also assist you in locating alternative sources of subordinated financing such as mezzanine or asset based loans that will be acceptable to your bank. Informal workouts may not work if there is an insurmountable level of debt amongst a large number of creditors. This can be further exacerbated when certain creditors, banks or government bodies start taking steps to recover their debt. In these circumstances a Formal Restructuring that contains a statutory stay of proceedings may be required to resolve your financial problems.
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