November 2020: Consult the Expert Featuring Harry W. Greenfield

Q: What are some of the biggest obstacles facing companies in financial distress from considering restructuring?

A: Like most things in life, sometimes the biggest obstacle is recognizing that there is a problem. Many times when a business is in financial distress, the owners believe that the solution is right around the corner. As a result, the owners often continue to infuse their own capital into a failing enterprise without considering structural changes to the business. Until you have a plan that can fix the reason for the financial distress, all you are doing is throwing away your good money.

If a business is going to restructure and survive, or liquidate and pay creditors, the owners must recognize the trends quickly and take decisive action. During financial distress, cash is king. Identifying problems, preserving cash and obtaining professional advice are the best ingredients for a successful restructure or wind down, and will result in the best outcome for both the creditors and the owners of the business.

Harry W. Greenfield
(216) 294-4950
hgreenfield@bernsteinlaw.com

Written by Bernstein- Burkley, P.C. on November 16, 2020

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