5 Principles of Corporate Restructuring
By Jonathan A. Carson
History has shown that corporate restructuring can be a powerful tool to ensure a company's enduring value. To ensure successful emergence, companies and professionals should consider the following Five Principles of Corporate Restructuring.
- Be Smart. Get experts to help. Corporate restructuring is both an art and a science. Make sure you enlist help from experienced restructuring specialists. From the financial and legal advisors to the claims and noticing agent, these specialists should have experience in managing and dealing with the complexities of corporate restructuring.
- Be Quick. Time is of the essence. Recognized authorities in the restructuring industry are renowned for negotiating and consummating restructuring transactions expeditiously, where possible. From needs recognition to administration, the restructuring process can end in a relatively quick period of time, when feasible. A timely emergence from Chapter 11 is a successful one.
- Be Prepared. Organize information for efficiency. From the planning phase through execution of the corporate restructuring process, the organization of company information is critical. All key information should be clearly accessible to help expedite the process and easily locate the required data. Data and other information needed during the process can include financial statements, vendor listings, employee/retiree listings, contracts, real estate deeds, etc.
- Be Transparent. Disclosure is good. Develop a strategic communications strategy to disclose forward progress to relevant constituencies during the restructuring process- from employees and vendors to banks and the media. It is critical that you know what to say and how to say it, but it is also vital to recognize the strategic relevance of your communications. Success lies in open, transparent communications with all constituencies.
- Be Sensitive. Take stakeholders' financial insecurities into consideration. When dealing with financial matters of this scale, emotions run rampant. Be sensitive to the needs of stakeholders and provide reassurance that their matter is one of significance and is being addressed during the process. A company should not proceed with the corporate restructuring process without a thorough understanding of the implications and options available. While specific approaches to corporate restructuring may change, it will continue to play an important role in companies' quest to create enduring value.
To learn more about how KCC can help ensure your success, email or call us at 866.381.9100.