The Ethics and Thoroughly Rational Approach to Restructuring a Failing Business
– By Gary Nacht, Owner of Synergy Enterprises, LLC
Reorganization Creates a Win-Win for all Parties
– John Howe
UCC Article 9 Reorganization
- The first-position secured creditor receives their valuation of the collateralized assets without the time, cost and expense of the auction process.
- Subordinate creditors are dealing with toxic assets on their books at the point of insolvency. When the first position creditor removes subordinate liens from underlying assets through an Article 9 short sale, subordinate creditors can write those toxic assets down efficiently while taking advantage of the tax write-offs associated with their failed investment.
- Vendors, who would have taken a loss on outstanding obligations, may benefit by establishing a relationship with the purchasing entity, rather than losing a business relationship as well.
Rethinking Business Debt and Insolvency
A Greater Good
Business debt elimination can’t be understood solely from the perspective of the benefits to the insolvent owner, although there are many; or even from the perspective of the benefit to creditors. There is also a greater good. Too many jobs and too much economic activity are at stake. Owners, lenders, employees and our nation as a whole must re-conceive how business assets are liquidated at the point of insolvency. The potential economic stimulus offered to the economy as a whole can’t be overstated. The well-being of owners, lenders, employees, and our role in a global economy depend upon it. This is the better way.
About Synergy Enterprises
- Strategic business planning and financial modeling
- Streamlining operations
- Rationalizing corporate structures, overhead and operating expenses
- Contract negotiations with suppliers, lenders and other key stakeholders
- Increasing gross and net margins
- Upgrading data capture, access, analysis and KPI reporting
In August 2020, Synergy Enterprises formed an alliance with Second Wind Consultants to provide business owners and their trusted advisors a single-source solution for restructuring companies in distress by simultaneously tackling operational restructuring while preparing for an Article 9 sale
About Second Wind Consultants
Second Wind Consultants is America’s fastest-growing business consultancy, driven by a mission to preserve and generate economic value, with a core specialization in debt elimination that creates efficiencies for both owners and creditors. Second Wind works with private equity groups, alternative lenders, M&A professionals and trusted advisors across the country to facilitate new transactional solutions unavailable anywhere else.