Nearly one third of companies filing for insolvency do so as a result of a bad debt and lost sales from a major customer insolvency. Small to medium sized businesses with smaller financial reserves are the most vulnerable. Cash becomes king and all attention should be on liquidity management as events unfold and the business adjusts to a new, and often unknown, reality.
The earlier the planning starts, and defensive actions are taken the more likely the company will ride out the storm. Expect the unexpected and plan for the worst. Recognise that events will drive you rather than the other way around and seek experienced and conflict free advice at the outset. Discussions and negotiations will take you into unfamiliar situations with unfamiliar stakeholders. The more prepared you are, the more credible your plans are, the more support you will get and the more favourable will be the outcome.
Above all the objective must be to avoid a cash crisis and an insolvency trigger whilst you reassess your plans. Understanding risk and directors’ liabilities in the zone of insolvency and restructuring and financial options available to adjust the business without losing shareholder and management control is critical. Beware the conflicted advisor who practices across the restructuring and insolvency divide who may be too quick to pull the insolvency trigger. And beware the opportunist investor seeking to benefit from your predicament by forcing an insolvency.
At BM&T we have over 20 years’ experience in guiding companies through troubled time to avoid insolvency and loss of control. Our professionals have hands on business experience having worked in senior positions in leading industrial companies. We work hand in glove with management adding our crisis management expertise and stakeholder negotiation skills to the industry skills of the company team. Nobody can predict where this situation is going but acting early and with the right support survival chances are maximised. BM&T is here to help.
50 Grosvenor Hill, London W1k 3QT
Alan Tilley; [email protected]; 07950 808777
David Bryan; [email protected]; 07801 034764
Matt Quade; [email protected]; 07879 846423