Businesses Restructuring
Our professionals have over two decades of experience in assisting private mid-size, small and family-owned companies in overcoming times of financial and ownership distress. Our tried-and-true mission for the past twenty years remains strong today – we are not “bankruptcy” attorneys – we are “restructuring” attorneys. Bankruptcy is a tool we have in our box of solutions that is used in very limited circumstances. Our initial plans and mechanisms for achieving our goals begin with strategies consisting of informal negotiation, private meetings, mediation with creditors and out of court plans.
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OVERCOMING FINANCIAL DISTRESS
Financial distress or concerns are common in a life cycle of a business. A common client we see is a mature company, one that has been open for many years, one that has a good reputation and a solid customer base, and one that even has experienced revenue growth. Often, because smaller companies have difficulty obtaining sufficient working capital loans and loans in general, they are forced to live and rely on their own cash to fund all of the obligations of their business. When business grows, expenses grow, cash outlay grows – but not often enough does access to cash grow. This often creates significant cash flow issues for an established business. Once you can’t pay a vendor on time, small business is penalized with the tightening of terms, the lowering of credit lines and less cooperation. As one rope in tightened, it’s common to “rob Peter to pay Paul”. Unfortunately, soon “Peter” reacts the same way “Paul” did – and while “Paul” got paid, they are not willing to give concessions going forward. Soon “cash flow” issues can lead to larger issues of slow production, employee attrition, lack of ability to make capital improvements and insufficient resources to engage in appropriate marketing (to name a few). This leads to a decrease in the bottom-line dollars available to the owners/partners and even can affect a business’s ability to continue as a going concern. This snowball effect can happen fast. But there are many solutions and many can be quickly implemented.
Other issues such as (a) legal actions being threatened or taken by key parties such as lenders and landlords; (b) IRS demands stemming from non-remittance of 941 (payroll) taxes or otherwise; (c) employee walkouts; and/or (d) Receiver appointments are common issues we confront and can stop immediately.
If these issues are confronting your business, our team is available to talk. We have a special preliminary 90-minute courtesy consultation program that assesses your issues and offers practical solutions. The sessions are held most business days at 3:30pm ET. The reservations for sessions typically go fast. Click here to obtain information regarding signing up.
OVERCOMING OWNERSHIP DISTRESS
Disputes amongst the owners of private business is a common issue. If left uncorrected the dysfunction caused by inner fighting between owners can serve to devastate a company and potentially ruin it in total. Like many relationships, business owners partner together for many different reasons. Sometimes very little thought is given at the outset of a company’s life as to why various people are included in the ownership mix or in what percentages interests should be given. As time goes on, different circumstances including growth or just the passage of time lead to changing roles, different commitment levels and control of customers (to name a few). This can lead to necessary changes in the ownership make up. It also can lead to hostilities, turmoil and very poor communication.
Solving these issues take us down many roads. We have substantial experience in going down the roads and finding both legal and practical solutions. Typically though, the “do nothing” solution is the most dangerous and rarely leads to any change and in fact leads to even worse issues manifesting themselves.
If these issues are confronting your business, our team is available to talk. We have a special preliminary 90-minute courtesy consultation program that assesses your issues and offers practical solutions. The sessions are held most business days at 3:30pm ET. The reservations for sessions typically go fast. Click here to obtain information regarding signing up.
MERCHANT LOANS
Has your company loaned money from a source that is requiring it to pay the money back over a relatively short term through daily (or weekly) debits from your operating account? This setup can cause extreme issues to your business, including significant cash flow issues. We have counseled clients for over a decade in dealing with this still new form of lending. If you find yourself in this situation, contact us to discuss.