Restructuring/Financial Distress Advisory Services
We assist financially challenged companies and their stakeholders in assessing their strategic options and executing a plan to optimize the business' value and thereby protect the stakeholders' interests. Our approach to value generation in financially distressed companies has saved businesses and produced wealth for owners and stakeholders in the recovery, as many of the restructuring engagements were done without the client having to file for bankruptcy protection, with no loss to the bank or other creditors and, most importantly, with the client's business returning to profitability. As past clients will attest, the approach utilized by George Nicholson and Tom Dolembo produces results:
Testimonial – Jack S.
“We are a medical contract manufacturing company in southern California with roughly $12 million in revenues. As CEO of this and previous larger medical OEM’s we probably knew what to do, but we needed George’s financial acumen and persistent prodding to help us lower our break-even point in revenues by $2 million. More importantly, the “dash board” and changing our bidding procedures (given the low utilization rate of our facility) helped us to significantly improve margins and improve market share in a tough economy. Now in 2009, and nine months later, we have returned to 15% plus EBITDA margins and thinking about going to market with the company.”
Testimonial – Bill T.
“We were a $150 million distributor of building products and a dry kiln operation in the northeast after the savings and loan crisis back in late 1980’s. We had two majority owners in their 60’s, the bank who wanted out and our company was having trouble. George and Tom were able to accomplish in less than six months what we would have thought was impossible. Together, we were able to find a new lender on reasonable terms, complete a buy-out of the two older partners and develop a strategy to return the business to sustainable profitability. The end of the story- the economic cycle improved, the strategies kicked in and we were able to sell the business some years later at a very good price.”
Our Approach
By coupling a fresh perspective with our restructuring experience and expertise, we are able to fashion timely and effective solutions specifically tailored to the client's crisis that create "win-win" scenarios for the owners, the debt holders and other stakeholders. With that approach as a guideline, we start with “the end in mind” and balance the process with short and mid-term objectives, measured milestones, open communication with all stakeholders, and "disciplined flexibility" as each business and situation will require different solutions. Typically, our approach will include the following:
- Phase I: Game Plan Development – after a comprehensive, realistic assessment of the business, the goals, performance milestones and strategies are established by all key managers and advisors providing a roadmap to triage immediate issues, as well as to execute Phases II–IV
- Phase II: Triage – analyzing cash flow issues and devising and assigning immediate, specific action steps to manage toward cash flow breakeven and sustainability
- Utilizing our proprietary software that can predict and manage cash flow for the next quarter, we stabilize or otherwise manage to cash flow through a realistic projection of revenues and through a deep analysis of expenses and debt payments which have to be incurred to successfully execute the game plan
- In order for major creditors to understand the commitment required on behalf of all stakeholders to implement viable solutions, we candidly share the "inside" view of cash flow and the businesses current position with all stakeholders
- In order to give the game plan an opportunity to be successful and to avoid the expense, business disruption and negative repercussions of a bankruptcy filing, we gain the confidence of major, crucial creditors in the game plan and discuss with such creditors viable solutions and preliminary commitments and concessions necessary for all stakeholders to successfully execute those solutions
- Phase III: Achieve/Enhance Profitability and Funding of Short-Term Needs – developing a daily and weekly “dash board” to monitor the key performance indicators of the business and generating and/or procuring the necessary funding to meet day-to-day business needs
- In order timely to analyze and take any required or advisable corrective action, we assist the management team in developing and monitoring key performance indicators by using daily and weekly “dash boards”
- After management has gained the confidence of, and credibility with, creditors by executing on the triage plan and the quarterly cash flow forecast, we assist management, if necessary, in securing necessary funding to meet day-to-day business needs
- Part IV: Emergence and Growth – redefining the business to compete and thrive given the constraints lingering from the turnaround, as well as the current economic/industry conditions
- Having managed to the crisis, we assist in an in-depth, "out of the box" analysis of the business in order to potentially re-position the business, including a review of the business' industry, competitors, clients, new market opportunities, etc.
Our Services
Our restrucing/financial distress advisory services cover a broad spectrum and are tailored, in large part, to the success of the engagement:
- Crisis Avoidance
- Restructuring Equity
- Restructuring or Refinancing Debt
- Procuring Bridge Capital or Rescue Capital
- Stakeholder Negotiations
- Selling Distressed Subsidiaries or Divisions
- Corporate Viability and Alternatives Assessments
- Procuring Debtor-in-Possession Financing
- Pre-Packaged and Pre-Negotiated Bankruptcies