Restructuring Solutions

Challenging to run in the best of times, it is particularly hard to lead a company when the primary focus is generating enough cash flow to keep the doors open. Restructuring entails some level of modification of the company balance sheet and operations to ensure a company’s survival. These changes range from the introduction of a new credit facility to substantial modification of vendor or other debt balances, resulting in a situation where the company can operate, perform on obligations and thrive going forward. There are many reasons a company may find itself in need of assistance – from underestimating the resources needed to move from one stage to another, to the impact of unanticipated outside economic events such as the recent “Great Recession."

Whether you are a veteran of a prior restructuring adventure or new to the game, give yourself an edge and tap the vcfo team for calm, professional and experienced guidance through this difficult and critically important period of realignment. vcfo has been providing restructuring assistance to clients since our inception in 1996, and have successfully assisted numerous clients in navigating through periods of severe financial stress with restructuring activities or, in some cases, orchestrating an orderly wind down of operations. Through our experience we have learned that there are a number of processes that can be applied to all companies in this situation.

Our approach to restructuring entails the following steps, led by a seasoned vcfo CFO consultant:

  • Reviewing the business and financial conditions to quantify the scope of the problem
  • Interviewing management, investors, board members and key team members to understand the environment and the reasons contributing to the financial crisis
  • Preparing an immediate four-month detailed weekly cash flow projection based on current sources of cash
  • Working with management to identify and implement cash saving strategies for the company
  • Studying terms of all vendor and debt agreements
  • Determining critical ongoing relationships and vendors
  • Reviewing all receivables for status and developing actions if needed
  • Evaluating conversion to cash of excess inventory and other assets not in use, if applicable
  • Preparing updated forward-looking forecasts reflecting necessary changes and covering at least a year in detail
  • Working with management to design a plan of repayment that is largely consistent with a proper restructuring methodology
  • Offering a new and reputable face to the lending and vendor community on your behalf, which is important if the company has not performed against prior negotiated terms
  • Finding the optimal source of capital for the company to perform on a go forward basis
  • Negotiating to satisfactory terms with debt holders and vendors
  • Immediately correcting any corporate and D&O insurance that has lapsed for non-payment