When a business faces a challenge that threatens its profitability and survival, turnaround restructuring can be a viable solution. This process involves a comprehensive review and reorganization of a company’s operations, policies, and structure to survive financial distress and improve performance. In most cases, partnering with a financial advisor for this in-depth and sensitive process is beneficial. This article discusses various aspects of turnaround restructuring as a guide for businesses that may benefit from business turnaround consulting services.
Bankruptcy and Receiverships
When a company’s financial obligations exceed its ability to pay, it may file for bankruptcy. This legal process allows the company to reorganize its debts or liquidate its assets to pay off creditors. A receiver may be appointed by the court or creditors to oversee the process, ensuring that the company’s assets are used appropriately to repay the debt.
Wind Downs and Liquidations
Sometimes, the best course of action may be to wind down the company. This involves gradually ceasing operations and selling off assets to pay creditors. Liquidation is a more drastic step, where all assets are quickly sold off. Both wind downs and liquidations are complicated transactions that require thorough planning and careful execution to maximize the return to creditors and minimize legal complications.
Forbearance and Loan Restructuring
Forbearance is an agreement between a lender and borrower to suspend or reduce loan repayments temporarily. This can provide a company with much-needed breathing space to restructure its operations. Loan restructuring modifies the terms of a loan to make it more manageable for the business. Some options include extending the term of the loan, reducing the interest rate, or converting the debt into equity.
Right Sizing of Operations
Right sizing involves adjusting the scale of a company’s operations to match its current situation. Depending on the circumstances, this could involve downsizing or upsizing. The goal is to achieve an optimal size that maximizes efficiency and profitability while minimizing costs.
Capital Sourcing and Financing
Finally, securing the necessary capital is critical to any turnaround strategy. This capital could come from various sources, including equity financing, debt financing, or strategic partnerships. A well-structured financing plan can provide the funds needed to implement the turnaround strategy and put the company back on the path to success.
Turnaround restructuring is a complex process that requires careful planning and execution. However, with the right strategy and support, it can help companies navigate through financial distress and emerge stronger on the other side.
JACO Advisory Group specializes in turnaround management and restructuring services for middle-market companies. Our team has experience creating and executing actionable plans to address the immediate issues causing distress and get your organization back on track. We understand that every business is unique, so we focus on creating tailored solutions that address the specific challenges faced by each company.
Our turnaround advisory services give stakeholders peace of mind that their temporarily troubled company will receive the guidance it needs to return to sustained and profitable growth. Picking a trusted, adept turnaround advisor like JACO Advisory Group lets you rest assured that you are making the best decision possible for your business in these urgent situations.
If your business is facing financial difficulties and you are interested in working with a JACO strategic advisor, Give us a call, or drop us an email today for an in-depth consultation.
About Jeff
Jeff has over 25 years of strategic planning, business development, and business transformation leadership experience. Having worked with mid-market, closely-held and family-owned businesses his entire career Jeff has a unique understanding of how these enterprises operate and the challenges they face.
He is passionate about working with business leaders to build strong cultures while developing and executing strategies that deliver exceptional results that benefit all the company’s stakeholders. Jeff’s hands-on approach to working with companies begins with a commonsense approach to strategy development.
With extensive experience in organizational turnaround and growth Jeff follows a defined process (disciplined, focused, intentional) to guide clients from strategy to execution. His experience covers a multitude of industries, with an in-depth understanding of automotive manufacturing.
Jeff holds a Master’s in Business Administration from the Capital University School of Management and earned a Bachelor of Arts in Business Administration and Management from Ohio Dominican University.
