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When Robert Bischof first walked into the Leighton-Buzzard Buzzard plant of the fork-lift truck manufacturer Lancer Boss he was dismayed by what he saw around him. Antiquated machinery, a demoralised […]

The responsibilities of chief financial officers (CFOs) and their staff during a bankruptcy filing are divided into three essential categories. The first of these is the collection of numbers. The initial task that needs to be undertaken during this stage is the preparation of documents prior to the Chapter 11 filing. Required papers include a report on the company's assets and liabilities, a list of the largest creditors, a schedule of current income and expense, and a statement of financial activities. After the filing, the CFO assumes the responsibility of preparing the schedule of assets and liabilities, and the monthly and special financial documents required by the bankruptcy courts. The second category is the analysis of the numbers. This activity enables CFOs to make a business plan designed for the turnaround of the company. The last category is the reporting of the numbers to all those involved, including the the management, suppliers, creditors and the court., After the Allied troops turned back the Afrika Korps at the Battle of El Alamein, Churchill cautioned: 'This is not the beginning of the end. This is only the end [...]

The value of a debtor's bankruptcy estate affects debtors' post-filing actions and reorganization relief and secured creditors' likelihood of full recovery. The going concern value standard, which reduces expected future earnings by future risk factors and interest rates, is used when granting debtors stays of execution, dealing with debtors' requests to use, sell or lease property of the estate after filing but before debt payment and when confirming a debtors' reorganization plan. The earning capacity standard is applied to situations involving post-filing securing of credit, exemptions and property abandonment.

On Feb. 7, 1991, Victor J. (Jerry) Kurzweg III wrote the hardest letter of his life. 'Dear Valued Customer,' began the letter from the chairman of Consolidated Companies (CONCO), Metairie, [...]

An accurate valuation and appraisal analysis can significantly affect corporate restructurings and bankruptcies. Key determinants are property and securities assessments as well as the extent of insolvency for bankruptcy cases. The acquisition of accurate valuation and appraisal data at crucial points of the restructuring or turnaround plans is essential for the successful implementation of these activities.

There are approximately 6,120 hospitals in the United States.[1] Of these, it is estimated that approximately 918 are 'financially distressed.'[1] Despite the impressive (and depressing) magnitude of these numbers, no [...]

What strikes fear into even the flintiest chief executive? Two possibilities: Having the board of directors withdraw its support and filing for Chapter 11. But horrors aside, running the bankruptcy […]

Several articles on management under bankruptcy have appeared in the management literature concerned with issues of 'image'|1~ and the characteristics of firms most likely to go bankrupt.|2,3,4~ This paper contributes [...]

Accountants must detect financial difficulties in early stages so they can help prevent bankruptcy and initiate a turnaround plan for a failed business. Early detection of business downturn prevents insolvency cases and preempt any drastic actions from government, lessors, suppliers and lenders. Business failure first shows up in the cash flow when payments due creditors can no longer be met. Hence, business must be honest and divulge its conditions to pacify and assure lenders and suppliers payment and continuity of business. Inevitably, any plan of recovery must be brought before them to secure their cooperation and approval.

Businessmen must confront business downturn and immediately plan recovery instead of hiding the situation until it is too late to prevent insolvency. An independent business consultant can be brought in to help devise recovery strategies. Steps in a turnaround plan include assets re-valuation, cash infusion, inventory reduction, employee downsizing and closure of some offices. However, entrepreneurs must immediately inform employees, suppliers, lenders and clients of the situation, present recovery strategies and secure their cooperation and approval. A typical turnaround is described.

In recent years, businesses that generate financial assets such as automobile loans, credit card receivables and trade receivables have satisfied their cash needs by engaging in structured finance transactions.(1) Rather [...]

Chapter 11 reorganization of debt to prevent foreclosure is a common practice in these troubled economic times, but there are serious implications for borrowers and lenders alike THE TERM 'BANKRUPTCY' [...]

Banking transactions and processes have profited tremendously from the introduction of automated tools in the form of computer hardware and software. Credit analysis, an important banking procedure, could be expedited by the use of decision-support software which use expert systems. An analysis of a particular product, the FAST Advisor, produced by Financial Proformas Inc is presented. The software produces reports, that would have taken days to be generated, in less than an hour. The improvement in productivity and consequent savings are significant.

Companies that apply for Chapter 11 of the Bankruptcy Code in order to survive via a reorganization plan more often than not still keel over. The need for an independent crisis manager becomes all-important for a successful transition into full recovery. The manner of evaluating the management team in charge of steering the company in the transition, ways how lenders can help the crisis manager in his job, and the right perspective that lenders should adopt with regard to the troubled company are all discussed.

How can an airline that lost $121 million last year hope to execute a turnaround? The leaders of Hawaiian Air are banking on some desperate maneuvers--and crossing their fingers. Peter [...]

Latin American companies, like their counterparts in the United States, have been hard hit by the economic downturn that has dug in its heels around the world. Those suffering the [...]

The successive crises in the new technology, telecoms, energy and travel industries over the past three years have created the biggest market for corporate restructuring since the recession in the [...]

Byline: Keith Crain Every day, there are new reports of some sort of roadblock to the eventual solution to the city of Detroit's bankruptcy case. And every day, there is [...]

SPECIAL TO CONTRACTOR HOUSTON -- Encompass Services Corp. announced Oct. 14 that it was proposing a financial restructuring plan as a 'prepackaged Chapter 11.' The company is soliciting the approval [...]

Payless Cashways Inc. board members knew they had played out the string when they assembled in late June for an emergency meeting. Their focus was urgent: how to solve financial [...]

WILMINGTON, Del. - On Dec. 13, 1996, Jerry Goldress, Bruce Ogilvie, and Tony Alvarez - respectively, the past, present, and future CEOs of Wherehouse Entertainment - sat quietly, listening to […]

When Orange County emerged from bankruptcy on June 12, attorney Bruce Bennett skipped most of the celebrations. 'I went home and went to sleep,' said the county's chief bankruptcy counsel, [...]

Chapter 11 trade claims is becoming an important business for brokers on Wall Street. Broker/dealers can earn annual profits of $250 million, or 25%, dealing in a trade claim market estimated at $1 billion. The Chapter 11 filing by Federated Department Stores in Jan 1990 began the real growth in trade claims. When brokers purchase trade claims vendors often receive 20 points per dollar, which increases creditor liquidity., NEW YORK (FNS) - Wall Street has jumped into the Chapter 11 trade claims business with both feet, changing the face of bankruptcy reorganizations for both trade creditors and debtors. [...]

Creditors can protect themselves from defaulting debtors by invoking the 1111(b) election in bankruptcy courts. Bankruptcy law allows debtors enough space to plan for payments on delinquent loans, giving undersecured creditors assurance that the debt will be paid. The 1111(b) election allows creditors to foreclose on the debtor's property and still get the debt payment in full. This move helps the creditor avoid a cramdown of its lien.

Revco DS Inc's financial health has been restored four years after its bankruptcy reorganization. Chapter 11 has given it access to restructuring programs that a non-bankrupt company could not afford. Revco was able to downsize its store base and use the divestiture proceeds for upgrading profitable outlets. It has installed point-of-sale scanning registers and the Prescription Access Link in its outlets. Revco has also redirected its product lines to health care and has become more of a conventional drugstore. Revco had comparable-store sales growth of 10.6% for the 4th qtr and 9.3% for the fiscal year ended May 1992., Given the inescapable flight to Chapter 11 protection thrust upon it in July 1988 by a leveraged buyout gone sour, few companies could have made a greater virtue of necessity [...]

They cite rallied junk bond market to make their case Some investors want to know, "What happened to $1 billion worth of appreciation in First Capital Holdings Inc.'s junk bonds [...]

Byline: David Moin Add Fortunoff to the list of well-known retailers that might disappear from the American landscape. Sources said the jewelry and housewares chain, confronted by mounting difficulties on [...]

A blend of confidence, experience and ego pulled John Portman through the last 18 months of massive debt restructuring. 'It sure wasn't tiptoeing through the tulips,' says Portman of the [...]

Byline: Vince Galloro Hospital Partners of America and Lehman Bros. Holdings have something in common: bankruptcy. HPA, Charlotte, N.C., along with affiliates, filed last week for Chapter 11 protection in [...]

As nonaccruals climb and foreclosures mount, the role of the workout department becomes pivotal. Below are some thoughts on getting your workout group ready for the increased volume ahead. Given [...]

Summit Global Logistics filed for Chapter 11 bankruptcy protection in late January, but its senior secured creditors and executive management feel confident enough to give the company another go as [...]

Byline: James B. Treece Dana Holding Corp. exited Chapter 11 protection on Friday, Feb. 1, just as light-vehicle sales are deflating in North America. So be it, says John Devine, [...]

Byline: Robert Sherefkin Richard E. Dauch didn't let the bankruptcy of Dana Corp. get in the way of years of rivalry. Dauch, CEO of American Axle & Manufacturing Holdings Inc., [...]

Six years after crushing debt drove it into bankruptcy reorganization, Federal-Mogul is poised to come out of Chapter 11 this week. And new drama - in the form of a [...]

Byline: Hans Dietmar Burgel Research and Development (R&D) is focused on supplying an enterprise with new products, services, applications, processes, etc. It typically starts at the beginning of operational value creation and has usually a long lead-time before its results become effective. Reorganisation in the traditional sense will often lead only to short-term success with the danger of reducing the long-term earnings potential of R&D. It should be applied only during company crises. R&D should rather be engaged in constant restructuring efforts in all functional areas and processes concerned. This paper describes instruments that can help to make these measures effective.