Day-to-day practical issues

During the initial stages of distress when considering restructuring as an option, it's important to act quickly to stabilise the company. Key actions include:

•
identifying any conflict issues (see Practice Note: Conflicts in restructuring and insolvency)
•
appointing a chief restructuring officer (CRO), if necessary
•
obtaining comfort from any parent company (see Practice Note: Comfort letters)
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getting key creditors to enter a confidentiality agreement
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starting communications with key suppliers and customers
•
reviewing key documentation to understand the relative bargaining power of parties (ie ROT claims, subordination and proprietary claims)

Chief Restructuring Officer (CRO)

Some creditor committees may insist on the appointment of a CRO as a condition to continued negotiations given the skills they bring to the situation:

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calmness
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fire-fighting abilities
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ability to take decisive action
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good communication with all stakeholders
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independence
•
receptive to new ideas

Once the CRO has the support of the management team (subject to any necessary changes) they can start to turn around the business. As the turnaround progresses, control will gradually be handed back to the

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