Approaches

Turnaround & Restructuring Approaches

 

Turnaround: an approach that focuses on improving the operational and financial performance of a company with the goal of improving EBITDA and Enterprise Value. Appropriate for many companies in early-to-late stage financial distress.


Restructuring: an approach that focuses on working with a company’s lenders, bondholders, other debt holders and vendors to restructure the company’s capital structure to lower debt service, increase cash flows and provide time to improve profitability. Appropriate for companies with positive EBITDA but high debt levels. 


CRO / Interim Management: an approach that involves Arch + Beam personnel taking the role of interim officer or fiduciary roles such as Chief Restructuring Officer, Interim Chief Financial Officer or Chief Operations Officer to run day-to-day operations and implement the turnaround & restructuring plan.

Reorganization and/or Operating Asset Sale Approaches

 

Asset Sales: an approach that focuses on running a commercially reasonable sale process to sell a distressed operating company, inventory, machinery and equipment, real estate or other assets with the goal of obtaining the highest cash sale proceeds that are in the best interest of creditors. Asset sales run the spectrum from full company sales to individual excess asset sales.  


Chapter 11 Bankruptcy: a process where the company stays in control of the bankruptcy process to reorganize or complete a sale of the operating company, while being subject to oversight by the Bankruptcy Court and interested parties.  Appropriate for medium to large companies who want to continue operating in bankruptcy to effectuate a sale or take advantage of certain benefits of bankruptcy (e.g. automatic stay, avoidance of certain liens, contract / lease rejection).  


Receivership: a State or Federal court-driven process where Arch + Beam personnel are appointed as the custodian of the operating company or specific business assets for the purpose of turning around the business, implementing a sale or liquidating the assets to pay off creditors. Receiverships are appropriate when there are significant disputes between parties (e.g. lender, equity), an insolvent company needs to continue operating under new management and/or a bankruptcy is not preferred. 

Liquidation Approaches

 

Assignment for Benefit of Creditors (“ABCs”): in California, and certain other states, an out-of-court insolvency process that assigns all assets of the company to an independent fiduciary (“Assignee”) who liquidates all assets, which may also include a sale of the entire company, for the benefit of creditors, runs a claims process and distributes any final proceeds to creditors according to rules of priority. ABCs are appropriate for companies in wind-down with at least $100k of assets who have the support of their secured creditor(s) and have mostly patient unsecured creditors who will let the Assignee run the process. 


Plan Administration of Chapter 11 Plan: a fiduciary role after a bankruptcy Plan of Confirmation has gone effective. Appropriate for companies in Chapter 11 bankruptcy who require an experienced administrator to implement the Bankruptcy Plan and distribute remaining funds to creditors. 


Chapter 7 Bankruptcy Preparations: the work to prepare a company for a Chapter 7 Bankruptcy liquidation that will be administered by a Chapter 7 Trustee names by the US Trustees Office (part of the US Department of Justice). Appropriate for companies who have exhausted all other approaches.