Restructuring Advisors

Alternatives to Bankruptcy

For nearly all companies, filing for bankruptcy is thought of as a last resort, and rightfully so. Whether a bankruptcy case should be filed or not is dependent upon the particular state of affairs a company faces. This is a significant choice as many times the survival of the company depends on it. When making such a critical decision, it is advisable for the company, its Board of Directors and its Officers to seek advice from both qualified legal counsel as well as from operational and financial restructuring specialists.

There are a number of non-bankruptcy options that exist. These include but are not limited to, an out-of-court workout, debt restructuring, a forbearance agreement, and receivership. These and other options are determined by a variety of factors such as the annual revenues the company generates, condition of the balance sheet, where it is incorporated, total assets and more.

While all the factors above are important, of equal or greater concern is making certain the company behaves in a prudent fashion. It is extremely important for companies to fully comprehend that once debts begin to mount, its fiduciary duties and responsibilities change. Management typically has a fiduciary responsibility to the shareholders and a responsibility to act in the best interest of the company. However, once a company is teetering on insolvency, the scope of these duties changes and expands. The Board of Directors, Officers and senior management must focus not only on the best interests of the company but also must take into account how their actions and decisions impact the best interests of the creditors. Failure to do so is a breach of responsibility and can result in legal battles.

Restructuring Advisors has helped numerous companies work through major operational and financial restructurings in and out of court. Our approach is to work in a manner that protects the company’s assets, Officers, Board of Directors and fully takes in to account the best interest of the company’s creditors. Call us today and we will help you sort through the various issues working toward a decision best aligned with your specific situation.