The signs of potential distress are evident prior to actual failure, and a stakeholder may be able to take corrective action before failure finally occurs.

The situation can be salvaged if the company is profitable and cause of difficulty is:

• financial mismanagement
  
• if the underlying cause of distress is not external.

Many companies can be preserved as going concerns, despite difficulties caused by past mistakes depending upon the degree of financial difficulty.

It may be in the best interests of all concerned to reorganize a company. The decision to go with a reorganization must be based on the likely future profitability of the company.

By changing its capital structure the reorganization effort involves the reduction of fixed charges by substituting equity and limited-income securities for fixed-income securities.

If the present value of the company as a going concern exceeds its liquidating value, only then will a reorganization be worthwhile from the standpoint of stakeholders.

In formulating a reorganization plan, our professionals generally follow three steps:

• determination of the total valuation of the reorganized company;
  
• formulation of a new capital structure; and
  
• assignment of valuation to the old securities in exchange for the new securities.
  

 Our mission is to provide SOLUTIONS for those clients and stakeholders in our engagements.