Your client’s company is the leading manufacturer of thingamajigs and everyone loves them. So why is the company still loss-making? With the aid of your crack legal team, you quickly deduce that the business assets are still good. The problem lies with the liabilities on the balance sheet. The existing debt and equity structure doesn’t make sense anymore and needs to be reorganised.
You tell your client that there’s only one option – Chapter 11 Bankruptcy, and this is potentially a good thing. It means respite from debt obligations while continuing to operate the company, thus being in with a chance to become profitable again. But a Chapter 11 is no mean feat and when looked at as a collaborative exercise, we quickly see how complex an affair it is. The question then becomes, how can HighQ’s enterprise collaboration platform make such an audacious undertaking more seamless?
Like any collaborative adventure, people are at the core of it. So who are the stakeholders? First and foremost is your client and his team of investment bankers, accountants, lawyers and senior management. Next is the US Government, specifically the US Bankruptcy Court, United States Trustee and Chapter 11 Trustee. Depending on the particulars of the case, the IRS, SEC and a handful of other governmental departments maybe be involved too.
Other important parties include senior debt holders and their Creditors’ Committee, lessors and parties to Executory Contracts, and equity holders with their bankers, lawyers and representative committees. It’s worth mentioning that these stakeholders need to protect their loans and investments from being written off, so this proceeding could become contentious. Good communication will go a long way toward easing tensions. Finally you have insurance companies, claims agents, liquidation agents and a multitude of other service providers pertaining to the company’s business.
Managing and communicating with this many people is a logistical nightmare. HighQ’s suite of cloud collaboration tools lightens the load by inviting all stakeholders to work in single secure space, accessible anytime anywhere. When you throw in consumer grade social tools like people profiles, blogs and activity streams, the process becomes all the more smooth. For example, HighQ’s wiki module can be used to create, share and modify the plan of reorganisation in partnership with the all important creditors committee. This type of real time inclusive collaboration could expedite the plan’s confirmation in court.
Next consideration is time. Significant events in a Chapter 11 proceeding can take place over the course of a year with specific milestones along the way; Chapter 11 petition, first day motions, the ‘Statement of Financial Affairs and Schedules’ filing, the creditors ‘341 Meeting’ and so much more. HighQ’s time management modules make light work of ensuring stakeholders are notified of events and tasks relevant to their role.
No Chapter 11 is complete without tens of thousands of documents that need to be shared and scrutinised by accountants, lawyers and bankers. The files and virtual data room modules in our enterprise collaboration software act as a central repository for such massive volumes of data. Files can be uploaded in seconds, organised into logical folder systems and shared instantly. All done while maintaining full access control via granular permissions (to create ethical walls for example) and auditing (for regulatory compliance case in point).
A Chapter 11 bankruptcy, beyond just a legal proceeding, is also a financial transaction. As such it should benefit from enterprise collaboration workflow tools such as HighQ’s Q&A module which could be useful when entering a stalking horse bid. Additionally, our robust structured spreadsheet/database module called iSheets will allow tasks like due diligence, for things like DIP financing, to be automated.
Finally, going back to the stakeholders for a moment, we mustn’t forget the more sensitive participants such as disgruntled employees and other business partners (suppliers, distributors and so on) who’s livelihood may well depend on the outcome of the bankruptcy. HighQ’s cloud collaboration solution provides the ideal platform to offer open and honest communication to those that are impacted by a potentially jarring restructuring process.So if you’re involved in a Chapter 11 bankruptcy, why not contact us or request a demo to see how we can help you streamline the way you handle the administration of such a complex and often sensitive matter.