Business • Medical • Dental Turnarounds • Restructuring • Crisis Management • Brokerage • Bankruptcy Consultancy

Devon-French, LLC

Bankruptcy, Workout or Recovery?

Many small businesses, medical/dental practices and corporations are quick to file for bankruptcy as the ultimate solution to their problems without being fully informed as to the serious permanent consequences for both trade and customer relationships. Even if your practice or business is incorporated at the time of the bankruptcy filing, there is only a very thin ”paper” wall between the senior officers and the Company. For example, personal guarantees on loans to the practice or business can devastate the principal’s personal credit.

We can quickly establish a voluntary workout program with your creditors to avoid bankruptcy. In the process, we will completely restructure your personal business debt and position you and your practice or company for a rapid return to profitability or, alternatively, for the sale of the assets. Our process will enable you and practice or business to reap most of the benefits of a bankruptcy filing without suffering the drawbacks of this protracted and expensive process.

Bankruptcy Statistics

A huge 50% increase in Business Bankruptcies was recorded for the last 6 months of 2007, when compared with same period last year. The total corporate filings for the last half of 2007 were 11,563.2006 saw a 24% increase with 39,201 business filings.

This figure was higher even than the post 9/11 ‘fallout’ year of 2002.

In 2002, 38,540 businesses filed for Bankruptcy in the United States. Of those 38,540 failing businesses, 186 were public companies seeking Chapter 11 protection for combined assets totaling a massive $368 billion. This easily surpassed the previous record year of $259 billion. It is significant to note that of the 20 largest bankruptcies of all time, 10 of them were filed last year.

The year 2003 showed a small improvement with 35,057 filings and 2004 has recorded 202 less filings to date for the first three quarters of the year compared with the same period for 2003.

An analysis of the facts behind the statistics shows:

1. Denial and Procrastination are consistently the number one causes of bankruptcy.

2. ”Creative accounting” and outright criminal fraud played a major role in several of the well known larger business failures.

3. On the other hand, the vast majority of business filings were as a result of the principals either being unable or unwilling to react quickly enough to changing market conditions.

4. Many of these companies did not engage outside help until it was too late.

5. Almost all of the companies seeking court protection would have preferred to remain in business and filing for Bankruptcy was a last resort.

6. Forty percent of these bankrupt companies could have been saved with even an ”eleventh hour” hiring of a proven turnaround specialist.

7. Our firm’s Debt Resolution Service would have enabled these Businesses to enjoy most of the relief associated with a Chapter 11 Bankruptcy without losing control and suffering the well-known drawbacks of such action.


Debt Resolution

Our Debt Resolution Service can help you with a single problem account or a complete restructuring of your individual or corporate debt.

Corporations, individuals and medical/dental practices of all sizes nationwide have use this unique and timely service to their advantage.

Our Debt Resolution Service is equipped to handle a wide range of financial problems that require an immediate solution. Our objective will be to restore both your ”bankability” and profitability by reshaping your Balance Sheet and Profit & Loss. We achieve this through the settlement, reduction and liquidation of excessive debt, including disputed claims.

Some of the areas we address in our process include:

• Debt Management and Reduction
• Financial Workouts and Turnarounds
• Voluntary Liquidation as an Alternative to Bankruptcy
• Restructuring Medical/Dental Practices
• Restructuring of Real Estate Assets
• Receivable Financing and Collection
• Contract Negotiation & Resolution
• Sale of Assets Only
• Merger of Business

Workout

1. Creditors

Our priority is to negotiate for an immediate and rapid settlement of all troublesome debt and relieve our clients of the burdens associated with creditor and debtor collection process. A swift response is essential to ensure any overdue or delinquent debt does not deteriorate into legal proceedings and involve the additional costs of legal fees, court costs and compounding interest. Our system has a success rate of more than 99 percent.

Our initial engagement period is 90 days and during this time we would expect to resolve most of our client’s pressing debt issues. Our continued success in this traditionally challenging area has been attributed to:

• An open non-adversarial approach to creditors, which enables our clients to maintain continuity with their lenders, investors, bond/note holders, vendors, and customers
• Defining and setting strict deadlines for settlement agreements
• Encouraging the free flow of information between all interested parties

2. Debtors

In the workout process, immediate action is also essential for success with Accounts Receivable. The US Chamber of Commerce records that the chances of ever collecting on an account which is 90+ days delinquent declines at the rate of 15 percent per month thereafter. (These statistics are further deteriorating in the present economic climate).

Our objective is to recover all possible outstanding accounts within 30 days of receiving instructions and it is likely that the practice or company will start receiving the first payments within 19 days of our commencing operations.

Recovery

Once we have completed our workout process, we can negotiate for a restructuring of the remaining debt. This combination of debt reduction and restructuring is the key to radically reshaping the practice or company’s balance sheet, profit and loss, and opening the door for a swift return to profitability or the practice or business sold.

All successfully retired delinquent debt will be deleted from the practice’s or company’s credit record as a condition of settlement. The company’s new credit standing/rating will invariably open up new sources of debt/equity funding which would otherwise be unavailable. Our service has generated substantial increases in shareholder value for our publicly held corporate clients and has done much to increase the sale/merger value of privately controlled practices and companies.

 

If you want to start turning CHAOS into ORDER and RED back to BLACK, please call 480.557.8200 or contact us today for a free consultation.