Turnarounds

Turnarounds are a function of a willing lender, a dedicated debtor that will listen to his advisor and is willing to do everything that is necessary to keep the company open even if it means reducing sales by 50%, terminating relatives, selling excess equipment, renting what he needs and making sure that every new job makes money.  Turnarounds are also improved when the lender and the debtor yell for help six to twelve months earlier than when they normally do.

The turnaround starts with the Thirteen Week Rolling Forecast and Liquidation Analysis.  These are the top two reports that the consultant drives to show the debtor where he is.  Profitability is important to this process, but "Cash is King".  During this process, lenders are not willing to give "over advances".  If the debtor convinces me that they need an "over advance" to secure their future, I can convince the lender.  If there is an "over advance", the terms and conditions cannot be violated without throwing the customer into a final default which causes the lender to enforce the cognovit note.  Lights out.

The average turnaround takes six months to a year.  During this period, the debtor is looking for investors, a new lender while he is working the plan.  During the turnaround period, the company is reporting weekly to the lender as to the status of sales, cash, expenses, new business, business lost, product recalls, insurance claims, thefts and accidents.  If the consultant uncovers something detrimental to the survival of the company or a default of the loan covenants that the lender doesn't know about.  The debtor is given several alternatives to inform the lender.  The debtor can call the lender and explain the default and why the bank wasn't told; The debtor can call the lender with the consultant and have the consultant explain; the debtor may refuse to call the lender, at that time I ask for permission to call the lender, if not granted, I resign.