Refinance & Out-of-Court Workouts
First and foremost, Stone & Baxter’s restructuring practice is a debtors practice. For decades, business debtors all over Georgia and their individual owners have sought out Stone & Baxter’s special expertise in helping clients protect their assets and rehabilitate their troubled companies. Whether responding to urgent litigation, addressing operational problems, or restructuring problem loans or unmanageable debt, Stone & Baxter’s approach to restructuring is simple: We work closely with our clients to identify issues, recommend options, and implement solutions.
Sometimes Stone & Baxter’s approach reveals that bankruptcy is not an option. That revelation can be as important, if not more important, than identifying feasible options. More often than not, that approach reveals that there is, at least, a cheaper, more efficient, and better non-bankruptcy option. Thus, the hallmark of Stone & Baxter’s workout practice is reserving bankruptcy as the last option and pursuing feasible non-bankruptcy options first. However, there is no one-size-fits-all option for companies and their owners who are facing financial distress. The availability of those options depends entirely on the issues facing a particular client.
Having participated in hundreds, if not more than a thousand, “new client interviews,” Stone & Baxter’s attorneys have encountered just about every issue that can trigger or exacerbate business and financial distress, including each of the following issues:
- Looming loan maturities, payment obligations, and defaults
- Unmanageable capital requirements or structures
- Loss of collateral, whether through economic decline or casualty
- Cash flow shortages and liquidity crises
- Outstanding trade debt and problems with suppliers
- Business disruptions, downtime, and inefficiency
- Diminishing revenues, increasing expenses, and shrinking margins
- Governmental and regulatory interference
- State, local, and federal tax compliance and payment issues
- Business, shareholder, and owner litigation
- Failed merger and acquisition transactions
- Troubled ownership and management transitions
Unfortunately, many of the above issues tend to materialize in groups on an urgent basis and in a manner that even experienced business operators cannot predict. Making matters worse, there is often a driven, well-represented creditor or competing constituency on the other side who is protecting its position, capitalizing on a debtor’s vulnerability, or both. And almost invariably, the confluence of these issues and predatory constituencies occurs when client resources, especially liquid, financial resources, and time to respond are most limited.
The window of success being so narrow and the stakes being so high, it is essential that clients facing a financial crisis engage professionals possessing at least four characteristics:
First, a restructuring professional must have the ability to understand a client’s unique business and challenges very quickly, even in the face of a crisis. Stone & Baxter’s attorneys have spent decades learning about their client’s businesses and educating their clients about an insolvency environment that can be so foreign to their clients’ usual business experience. As a result of observing thousands of business patterns, Stone & Baxter is just as comfortable conversing with proactive, sophisticated, well-organized boards of directors as it is with brand-new sole proprietors whose circumstances are as chaotic as their business records are incomprehensible. Very rarely does it take Stone & Baxter’s attorneys more than an hour to “get up to speed.”
Second, a restructuring professional must have the ability to communicate in plain English the advantages and disadvantages of each available restructuring option and then, without being bashful or equivocal, recommend a definitive and concrete course of action. On the one hand, Stone & Baxter’s clients appreciate having their restructuring options laid out simply, calmly, and in a business—not legal—language that they can relate to. On the other hand, Stone & Baxter’s clients come to Stone & Baxter seeking more than an education. Rather, they pay for legal advice that is customized to their circumstances. Thus, they find it reassuring and even refreshing that Stone & Baxter does not shy away from answering the question every client asks but so many attorneys hesitate to answer: “If it were you, then that would you do?”
Third, a restructuring professional must have the ability to own and take responsibility for the chosen course of action and implement that course of action in an undaunted fashion without flinching. Successful implementation depends on Stone & Baxter’s deep understanding of commercial transactions, cross-disciplinary knowledge of business law, intimate familiarity with opposing parties and their lawyers, and difference-making negotiating skills. A weakness in any one or more of those areas all too often results in the delay, churning, and inefficiency that not only saps a client’s precious remaining time and resources, but also ruins even the most well-intentioned and well-chosen restructuring solution, and leaves clients dissatisfied. Restructuring is a serious business and, thus, requires a serious team of focused and deliberate professionals.
Fourth, a restructuring professional must have the experience and the objectivity necessary to recognize that, as often as out-of-court restructuring solutions can save time and money and avoid the unpredictability of court-supervised insolvency solutions, they occasionally do not work. Stone & Baxter’s clients trust that Stone & Baxter’s results-oriented approach positions it to be vigilant about changing course when necessary. Inexperience and inattention can cause a workout to languish or, worse, eliminate altogether the workout as an option. And Stone & Baxter’s adversaries understand that bankruptcy is always one alternative course when Stone & Baxter is involved. In fact, the real possibility of bankruptcy bolsters non-bankruptcy solutions.
With Stone & Baxter’s longstanding reputation for each of those characteristics, hundreds of companies and individuals all over Georgia have, for decades now, engaged Stone & Baxter as their trusted advisor to navigate them through all manner of business and financial distress, regardless of the stakes, the extent of their resources, or the capabilities of opposing parties.