As the economic impacts of COVID-19 begin to take hold, many companies may be forced to consider restructuring or even begin the process of filing for bankruptcy or insolvency. Managing through these complex situations requires skilled communicators who understand the legal, regulatory, and financial considerations and are able to combine government relations, stakeholder relations, and media expertise in order to help mitigate risk and reach the desired outcomes.
What you should be considering
- Boards and management will be under tremendous scrutiny: effective communication with employees, unions and pensioners, customers, suppliers, distributors and retailers, unsecured and secured creditors, and news media, will be critical.
- Many stakeholders will quickly seek to protect their individual interests, with multiple opposing or competing interests. Opposing parties may challenge management’s plan and its ability to restructure — or propose competing alternatives. The way you communicate your plan will impact how it is understood and whether it is supported.
- Restructuring processes may also involve debt refinancing, the disposition of business lines, assets or subsidiaries, and putting in place turnaround management. All of these are associated with a communications imperative, which will be central to optimizing results.
- Management’s reputation is often on the line. Stakeholders will demand to see that the organization is pursuing solutions in a timely fashion and that the company can continue to operate on a stable basis while restructuring.
- In some instances, various levels and offices of government may play important roles, influence the process, or have an interest (direct or indirect) in the outcomes. Government may also be a regulatory authority, potentially with a bearing on the feasibility of management’s restructuring plans. Therefore, government relations may be a part of the process and will demand government relations expertise with knowledge and experience of insolvency processes.
How we can help
We can help you with the critical task of communicating with employees, unions and pensioners, customers, suppliers, distributors and retailers, unsecured and secured creditors, and news media. This typically demands a level of experience and familiarity with restructuring and insolvency proceedings.
We work with legal counsel, corporate teams, chief restructuring officers, creditors and investors, and corporate communications leaders, often as part of the planning process for application for protection under Companies’ Creditors Arrangement Act (CCAA), and throughout the CCAA and restructuring process
The way in which management communicates can make a major difference (positive or negative) in respect to outcomes, opposition or support. Our financial communications experience in restructuring and insolvency can increase the effectiveness with which your position is conveyed, reducing the need for opposing views or positions to be put forward.