NTA-Riverbend is the investment banking practice within Riverbend Solutions Group. We specialize in M&A, Corporate Finance and Restructuring for privately owned, middle market companies. NTA-Riverbend offers comprehensive financial and advisory solutions at all stages of the business lifecycle. This includes advisory that addresses event the most difficult situations that a business might find itself in -- our advisors are experience in helping companies navigate tough times and help companies get back on track.
Exit & Transition
BETWEEN A ROCK &
A HARD PLACE
Financial restructuring is the reorganization of a business's assets and liabilities. The process is often associated with corporate restructuring, where an organization's overall structure and its processes are revamped.
Debt restructuring is a process used by companies to avoid the risk of default on existing debt or to take advantage of lower available interest rates. Debt restructuring can be carried out by individuals on the brink of insolvency as well.
A debt restructure might include a debt-for-equity swap, when creditors agree to cancel a portion or all of the outstanding debt in exchange for equity in the company.
A company seeking to restructure its debt might also renegotiate with its creditors to "take a haircut"—where a portion of the outstanding interest payments would be written off, or a portion of the principal will not be repaid
OUT OF COURT SOLUTIONS
REFINANCING | RESTRUCTURING
DEBT RESTRUCTURING is used when a borrower is under such financial distress that it prevents timely repayment on a loan. This is usually accompanied by delayed AP payments and general lack of liquidity that the business needs to function.
DEBT REFINANCING is used on a much broader basis than restructuring, in which a borrower leverages a newly obtained loan with better terms to pay off a previous loan. There are a number of alternative and special situations lenders that make this type of refinancing possible. If the problem is caught early enough, this is a solution that can help businesses get through a temporary rough period.
BANKRUPTCY AS A LAST RESORT/REMEDY Borrowers should consider the true cost of bankruptcy before engaging in either form of debt repayment strategy. An out-of-court debt restructuring or liquidation has the potential of achieving higher returns for all of the stakeholders at a lower cost. However, sometimes a bankruptcy is the only way to save a company.
CHAPTER 11 | 363 SALE
Chapter 11 is a legal process that involves reorganization of a debtor’s debts and assets. It is available to individuals, sole proprietorships, partnerships, and corporations. It is most commonly used by corporations. The reorganization allows the business to continue operations but under supervision, subject to the debtor’s fulfillment of some of his obligations. Since it is the most expensive of all bankruptcy cases, a business should do a careful analysis of all other bankruptcy alternatives before settling for Chapter 11.
A 363 Sale refers to the sale of an organization’s assets under Section 363 of the US Bankruptcy Code. The sale enables debtors to fulfill their obligations to creditors by selling their assets and using the funds collected to settle their debts.
The purchasers of the assets benefit from the opportunity to acquire valuable assets that are free of liens, claims, or other encumbrances – often at discount prices. The bankruptcy court grants the debtor-in-possession or trustee the power to sell the organization’s assets even when there is an objection from junior creditors, after a court hearing of their petition.
Cyclical businesses and businesses that are highly dependent on contract work must manage cash more efficiently and be better prepared to seek help when it is needed. Working with experienced financial advisors can help business owners understand when and how to take action at the first glimpse of a problem.
Taking swift action is crucial for achieving success in restructuring. Troubled businesses rarely have the luxury of waiting for things to turnaround. If a businesses is showing signs of distress we encourage their management to seek expert advisory ASAP.