Family-owned Business Restructure

The general theme with family businesses is that there is a lot more emotion involved.

Overview

Our client needed support while restructuring his distressed family businesses, which often requires addressing chronic under-investment and make-do attitudes in an emotion-charged environment where owners have everything to lose.

Alain Le Coq

Chief Restructuring Officer / fairsystems
The global financial crisis has pushed many businesses into a state of instability. When companies are struggling with difficult choices, fairsystems can support its clients in all phases of the corporate crisis from concept design to implementation. We offer our clients a multidisciplinary team with the right combination of experienced advisors from corporate restructuring, corporate finance, mergers & acquisitions, legal, tax, and business consulting. Our approach is always tailored to our clients’ individual circumstances and requirements. We help these clients review and realign their business strategy, improve their performance and deal with all involved stakeholders and distress situations

The Client

Our client, a family-owned business, was initially hesitant to seek advice and get involved with external advisers. It was mainly due to the fear of the related cost and of exposing the details of the family business’s inside politics. But our client eventually realized that if the price of giving in to those fears is losing the whole business then it’s a big price to pay.
Roadmap
1
Assess
The first step fairsystems took was to perform a quick but thorough assessment of the short-term cash situation and forecast. On this basis, and the analysis of stakeholders’ positions, a consensus on the next steps was reached. fairsystems also assisted in the preparation of cash-generating measures.
2
Deliver
fairsystems then closed the gaps between available and required information by preparing business reviews for lenders and investors. The scope of work was defined by standards or customized depending on the individual situation and included strategy review, management evaluation, analysis of past financial performance and position, business plan review, assessment of restructuring options, and measures, etc.
3
Continue
fairsystems' teams worked shoulder-to-shoulder with the company's management, stakeholders, and lenders at every level. Our multidisciplinary team of restructuring professionals delivered result-oriented measures to protect, create and maximize value throughout all stages of the corporate crisis from concept development to implementation and monitoring.
Solution Details

@fairsystems, we know that challenges are merely opportunities in disguise.

Credit exposure recovery
Deliverable: fairsystems helped our client undertake a swift and reliable analysis of their credit exposure situation to develop a recovery strategy and ‘Plan B’. Our team also provided comprehensive support in the negotiation and implementation phase of the recovery strategy.
Risk of default preparedness
Deliverable: The risk of default is an unfortunate reality. When it affects the responsiveness of strategically important suppliers or business partners it can severely impact the supply chain and give rise to adverse financial and operational impacts. fairsystems' team assisted our client in swiftly analyzing suppliers’ financial and operational positions, developing and implementing a strategy to reduce financial risks and supply chain interruptions.
Business closure control
Deliverable: Situations may arise in which a company no longer strategically fits the group or a turnaround is unfeasible. Such situations can call for controlled business closure. Our cross-border, multidisciplinary teams of operational restructuring, legal, and tax experts helped our client develop scenarios and identify the path that will maximize existing value.
Businesses change realignment
Deliverable: Sometimes, it is necessary to restructure operations to stay ahead. Based on readjustments of the strategy (business model), fairsystems helped our client realign and optimize its organizational structures and business processes to ensure he meets the strategic objectives.
Market change awareness
Deliverable: Industrial, trading and service companies face new challenges every day. In times of continuous change and market development, a focus on fundamental business performance is needed to achieve improved, sustainable results. Fairsystems' team helped our client increase his organization's competitiveness by optimizing his business model and ensuring the strategic fit of current and potential market propositions and his operating model.
Stakeholders' confidence boost
Deliverable: In distressed situations, stakeholder confidence is key. Yet it can often be impaired by a company’s financial difficulties. Additional information prepared by independent advisors is usually required by lenders and investors in order to facilitate decisions. fairsystems bridged the information gaps between available and required information with an approach that is customized to our client's individual situation.

Result:

fairsystems’ approach helped the client’s management team regain control and trust from lenders and investors. It also provided transparency to stakeholders and supported the required negotiations.
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