CHAPTER 11—ADVISORY AND PREPARATION SERVICES
Opportunity
Insight
Today’s businesses, faced with an increasing array of challenges, are turning to corporate
restructuring as a powerful strategy to overcome over-leveraged, underperforming situations.
Protecting entity value by focusing on the long-term strategies and performance of your
company is more important than ever.
Companies are tightening their belts and reassessing their priorities to improve financial
performance and avoid a potential bankruptcy filing. Despite all of the best efforts, outside
and unforeseen forces often make the decision to restructure inevitable.
Balancing the demands of ongoing business needs with the day-to-day administrative tasks
of restructuring can be overwhelming for debtors. No one understands these challenges
better than Protiviti.
Key indicators that management’s discussions should include the possibility of restructuring are:
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Operating losses
Financial difficulty of key customers or suppliers
Disintegrating lender relationships
Change in credit rating
Significant downturn in operations
Recent financial restatements or allegations of fraud, causing lender fatigue
Debt covenant violations
Early identification and thorough assessment of a problem combined with a quick response
are vital for business survival and growth. Amid financial distress, it is imperative to develop
and implement effective plans to create operational and financial stability as quickly as possible.
The complex issues involved in these challenging situations necessitate solutions to restore
business value in the shortest possible time. These solutions must be created through close
collaboration among management, the board of directors, creditors, employees and customers
to devise and execute a successful restructuring plan.
Impact
When not addressed properly, financial distress can lead businesses to make decisions
that cause potential harm to both short- and long-term value. Companies that are proactive
in managing through uncertain times become empowered to focus on opportunities,
mitigate challenges and put themselves in a position to emerge from bankruptcy viable,
profitable and with a competitive advantage. Timely management of the situation is the key
to ultimate success.
While these challenges require a broad approach, the components of a strong management
response that will create long-term success include increasing working capital, strengthening
balance sheets, reducing costs and creating a plan for improved operational management.
Our approach is what differentiates us from other firms in the industry. Protiviti provides the
right combination of industry expertise and hands-on assistance. Each engagement is led by
senior-level management, providing the benefit of years of experience and knowledge and
allowing us to maximize value for our clients.
Protiviti offers a broad spectrum of accounting and administrative services designed to help
debtors comply with the stringent disclosure requirements and administrative tasks that
are unique to the bankruptcy process. We provide the manpower, technical expertise and
software to prepare the debtor’s bankruptcy schedules, statement of financial affairs, creditor
matrix and monthly operating reports in compliance with requirements as set forth by the U.S.
Trustee’s Office.
How We Can Help
Bankruptcy involves many difficult decisions. Starting with a preliminary assessment, Protiviti
quickly evaluates the situation and develops a plan of action to best situate the debtor for
future success. Based on this plan of action, Protiviti will assist the debtor in operating the
company as well as handling the administrative tasks of filing for bankruptcy, beginning with
recommending beneficial dates to file for Chapter 11.
Bankruptcy involves two material aspects: operations and administrative tasks. Protiviti will
maintain operations and continually analyze cash flows to ensure the debtor is operating
optimally. Protiviti will provide rolling 13-week cash flows and prepare variance analyses to
pinpoint any material weaknesses.
We have the expertise and manpower to handle all administrative tasks associated with
bankruptcy. We will work with management to prepare all first day motions and analyze the
debtor’s assets and liabilities to coordinate compiling the debtor’s bankruptcy schedules and
statement of financial affairs.
Over the years, Protiviti has developed proprietary systems designed to track and report on
the claims scheduled, filed and adjudicated throughout the bankruptcy process, as well as
other systems designed to identify and pursue preference recoveries.
Our team also has extensive experience providing the following services to Chapter 11
debtors:
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Example
Obtaining DIP financing
Developing reorganization plan and disclosure statements
Preparing four-wall analyses
Divesting underperforming assets
Preparing short- and long-term financial projections
Determining locations to close
Avoidance action identification and management
Protiviti was engaged by the nation’s largest direct merchant of value-priced party supplies,
arts, crafts, toys and novelties. Protiviti’s team worked with the company’s management,
investment bankers and lenders to develop appropriate operational and financial
restructuring strategies and assist with the financial aspects of the Chapter 11 process.
The services we provided included:
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Preparing 13-week cash flow projections and variance reports
Assisting counsel with first day motion preparation
Preparing bankruptcy schedules and statements of financial affairs
Estimating the various classes of claims
Quantifying the return to secured creditors under various restructuring scenarios
• Assisting counsel with plan and disclosure statement preparation
• Assisting management with critical vendor negotiations and the contract assumption
and rejection process
• Preparing monthly operating reports
• Preparing analyses for the company to quantify its exit financing needs
• Analyzing claims and preparing claims reconciliations
• Assisting the company in performing all the tasks required to go effective and exit
Chapter 11
• Performing other operational, accounting and financial tasks related to the Chapter 11
process user
Additionally, Protiviti assisted the company in the claims reconciliation and objection process
and other post-effective date tasks.
Contacts
Charles Goldstein
+1.410.454.6830
charles.goldstein@protiviti.com
Michael Atkinson
+1.410.454.6836
michael.atkinson@protiviti.com
Guy Davis
+1.804.644.7000 guy.davis@protiviti.com
Suzanne Roski
+1.804.644.7000 suzanne.roski@protiviti.com
About Protiviti Inc.
Protiviti (www.protiviti.com) is a global consulting firm that helps companies solve problems in finance,
technology, operations, governance, risk and internal audit. Through our network of more than 70
offices in over 20 countries, we have served more than 35 percent of FORTUNE 1000® and FORTUNE
Global 500® companies. We also work with smaller, growing companies, including those looking to go
public, as well as with government agencies.
Protiviti is a wholly owned subsidiary of Robert Half (NYSE: RHI). Founded in 1948, Robert Half is a
member of the S&P 500 index.
©2013 Protiviti Inc. An Equal Opportunity Employer. PRO-PKIC-0613-116
Protiviti is not licensed or registered as a public accounting firm and does not issue
opinions on financial statements or offer attestation services.