Turnaround & Restructuring
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Are you managing distress or vice-versa?
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‘The powers that modern lenders wield rival in importance the hostile takeover in disciplining poor or under performing managers… When a business enters financial distress, the major decisions—whether the CEO should go, whether the business should search for a suitor, whether the corporation should file for Chapter 11—require the blessing of the banks' (Baird and Rasmussen, "Private Debt and the Missing Lever of Corporate Finance")
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Restructuring
Root cause analysis of distress, operations review, and stabilization plan
Short-term liquidity needs, develop operations-based rolling cash forecast ("13-week")
Sources of cash, working capital, capex, revolver, etc.
Review cash management system and processes (deposits, disbursement, trapped)
Review management’s valuations in light of the stated strategy
Evaluate alternative sources of liquidity (divestitures, asset sales, equity placements)
Business Plan
Review of management’s forecasts and valuation
Bottom up financial forecast
Feasibility of growth and market projections, working capital, capital expenditures
Corporate Finance
Reasonableness of sources and uses of cash
Valuation support for covenants, adequate protection, waterfall, POR
Evaluation of offers, negotiation support
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