1.
|
Question: |
Is
the "Slippery Slope" a financial condition? |
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| |
Answer:
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No!
The financials are the thermometer, not the disease itself.
The "Slippery Slope" is caused by operating problems. (Back
to top) |
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| 2. |
Question: |
Will
our bank or senior lender alert us to the problem? |
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| |
Answer:
|
Rarely!
Your bank should not be the provider of the early warning red
flag. The bank expects you to be on top of your problems.
(Back
to top) |
|
| 3. |
Question:
|
Once
we're on the "Slippery Slope", will our bank provide
turnaround assistance? |
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|
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Answer:
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Rarely!
Because of lender liability laws, banks are prevented from providing
direct assistance to troubled businesses. They may recommend a
turnaround specialist to work with the top management of the company.
(Back
to top) |
|
4.
|
Question:
|
Won't
our "Slippery Slope" problem attenuate or disappear
with some cost reduction, or a couple of good sales months? |
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| |
Answer:
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Rarely!
Most managers are optimists about their business and their ability
to "weather the storm." They wear "rose colored
glasses" and often fail to recognize the severity of the
signs and the difficulty of a turnaround. Another common managerial
trait is the "shoot the messenger" syndrome. In this
situation, subordinates are afraid to deliver the "bad news"
and it stays buried. "Management in denial" is often
the single most common barrier to early recognition and handling
of a slippery slope crisis.
(Back
to top) |
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5.
|
Question:
|
Once
a company is on the "Slippery Slope", is it possible
to get out of the negative spiral? (Back
to top) |
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| |
Answer:
|
Yes!
While it's difficult to get off the slope, it is possible.
The keys are early warning, getting professional help, objectivity,
accurate analysis and positive action.
(Back
to top) |
|
6.
|
Question:
|
If
we're considering engaging a turnaround specialist, what credentials
should we look for? |
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| |
Answer:
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Look
for consultants who "have been there, done that." It's
not the degrees that count in turnarounds, it's the experience.
Your turnaround team should be ready, willing and able to work
with you 24/7 to analyze the problems, develop the plan, manage
the crisis, (stop the hemorrhaging), negotiate the financial restructuring.
You'll need to have 100% trust in your team. And the turnaround
team should all be members of the TMA - Turnaround Management
Association.
(Back
to top) |
|
| 7. |
Question:
|
What
are the costs in a typical turnaround engagement? |
|
| |
Answer:
|
 There
are three types of fees you can expect to pay:
| Retainer:
One time only upfront fee which insures that you've
got the team on board. Retainers vary in size based on size
and complexity of engagements. |
| Hourly
Fees: Generally vary from $150/hour to $500/hour or
more for top guns in major engagements. |
| Success
Fees: Commissions or bonuses based on refinancing, M&A
transactions, etc. |
(Back to top) |
|
| 8. |
Question: |
What
types of specialists will the turnaround manager utilize?
|
|
| . |
Answer:
|
It
depends on the nature and complexity of the engagement? Typically,
the "bench" will include CPA's, attorneys, operating
specialists. If there are computer problems, the bench will
include
one or more IT experts. If the company has sales/marketing problems,
you should expect a sales/marketing expert. (Back
to top) |
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| 9. |
Question:
|
What's
BRS's  ? |
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| |
Answer:
|
The
is an overview provided by BRS. It's analogous to an annual
physical in the medical profession. We examine all facets of the
business in a 5-10 day engagement and provide an oral and written
report to management on our findings. In many cases, the provides
early warning on some key slippery slope problems.
(Back
to top) |
|
| 10. |
Question: |
What
are the costs of the ? |
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| |
Answer:
|
It
is a packaged price based on size and complexity of
the engagement. (Back
to top) . |
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11.
|
Question:
|
What
type of M&A (merger & acquisitions) transactions
are typical in a turnaround? |
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| |
Answer:
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Sale
of under-performing product lines, business units, sale of the
entire business, acquisition of businesses that provide improved
market share, technology advantages, management strength. Broad
range of options. (Back
to top) |
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| 12. |
Question: |
What
are some of the bankruptcy options? |
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| |
Answer:
|
Chapter
11 reorganizations, Prepackaged 11's, 11/7 liquidations. Broad
range of options requiring substantial expertise. In general,
bankruptcy situations are undesirable: time-consuming, expensive,
defocusing and damaging to the reputation of the business (which
may already be fragile). But sometimes the protections offered
are the only way out.
(Back to top) |
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| 13. |
Question: |
How
many bankruptcies are filed per year? |
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| |
Answer:
|
In
the year ending 9/30/02,
1,550,000 bankruptcies were filed and the trend line is upward.
(Back
to top) |
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| 14. |
Question:
|
How
is a business financed in a bankruptcy situation? |
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| |
Answer:
|
In
order to operate during a bankruptcy, a cash collateral agreement
with the senior lender is required. Sometimes, the senior lender
will provide DIP financing. DIP (debtor-in-possession) financing
can be obtained from a variety of sources. DIP financing ranks
ahead of all other forms of debt.
(Back to top)
|
|
| 15. |
Question: |
What
size of business does BRS handle? |
|
| |
Answer:
|
BRS focuses on small to midsize businesses, an area often neglected
by the larger turnaround/consulting organizations with high overheads.
(Back
to top) |
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| 16. |
Question: |
Who
can I contact for additional information? |
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| |
Answer:
|
Telephone: Toll-Free (877) TEAM-BRS (877-832-6277)
E-mail: info@teambrs.com
(Back to top) |
|
1.
