Representing Troubled Businesses

COUNSEL AND STRATEGIC ADVICE FOR BUSINESSES FACING FINANCIAL STRESS

Businesses face unique challenges and issues when they suffer a loss of liquidity, cash flow crises or a constriction in credit availability. Often the individuals who have successfully run the business in the past do not have the breadth of experience and business sensibilities necessary to respond to these challenges. The firm provides these clients with a clearer understanding of the issues and alternatives which they face under these difficult circumstances, helping the client formulate a strategy for protecting the business and solving the financial problems. In the process, the firm provides the client with an understanding of the issues which are likely to develop and the responses which are likely to prove successful as the client’s strategy is implemented.

NEGOTIATIONS WITH CREDITORS  

Often, the best strategy for a business facing financial stress is to engage in negotiations with key creditors, premised upon a frank discussion of the legal alternatives available to the business. In some cases, renegotiating a key license or restructuring a critical debt alone will enable a business to resume ordinary operations, and an exploration of the business’ legal alternatives will provide both sides with incentives to achieve the renegotiation. In other cases, it may be necessary to negotiate with creditors generally, seeking in the short term a suspension of debt repayments and collection efforts and in the long term a material modification in the business’ general payment obligations. This is commonly referred to as an "out of court work-out", and is ordinarily much less expensive and often much more effective (and less disruptive to the business) than a formal Chapter 11 bankruptcy case. The firm has regularly represented clients in out of court work-outs.

FORMAL INSOLVENCY PROCEEDINGS  

In most cases, an "out of court work-out" or a less formal proceeding, such as an assignment for the benefit of creditors, will prove in the client’s best interests. Where a Chapter 11 bankruptcy filing is necessary, however, the firm provides capable representation. By maintaining a strategic focus oriented around the client’s "exit strategy" and the objectives of the Chapter 11 case, the firm reduces the duration of the Chapter 11 case and increases the prospect of ultimate success. Wherever appropriate, the firm makes use of a "pre-packaged" Chapter 11, which makes it possible to complete the entire Chapter 11 process within a month.