Picking Up the Pieces in a Post-Pandemic World
Related Practice: Financial Services
The economy was already slowing in the fourth quarter of 2019, and then all this happened. Most businesses now find themselves on two sides of the same uncomfortable question: What do I do about the customers that owe me money and what do I tell the people to whom I owe money? After all, it’s hard to pay them if you’re not getting paid yourself.
We have long represented creditors, including institutional lenders and landlords in bankruptcy and other insolvency proceedings. As a result, we understand the kind of information that is important to creditors in making decisions about managing non-paying customers, and we have the experience to bring a practical approach to try to secure payment. We know that choosing the wrong path can also make things worse.
For those customers that owe you money, you are likely to have the same concerns as any lender. When will I be paid? Is that plan realistic or is it just a house of promises built on a foundation of hope? What are my options to enforce my right to payment, and does it make economic sense to pursue those? What is my best path to minimize my losses?
When a customer is struggling to meet its obligations, creditors want to see a realistic performance-based plan for how the customer will get back on track, and if that is not on the horizon, how the customer proposes to resolve the debt. If it is your business that is struggling to meet its obligations, do you know the hard questions to ask that will help you put together a realistic plan? Are you prepared for the difficult conversations not just with your lender but with other business creditors? We can help you be ready for that.
Keeping your creditors informed is its own currency. Those businesses who find themselves struggling today will have a better chance at recovery if they communicate with creditors rather than avoid them. For most creditors, a reasonable plan that leads to payment (with even modest payments along the way) is a better choice than a trip to the courthouse. A practical approach may mean the difference between whether you get paid and whether your customer survives, too.
We know the questions to ask, the documents that you will want to review and analyze when you are asked to accept someone else’s payment proposal, and what your choices are in the event of nonpayment. When we are in court, we are only there on behalf of creditors. We have the full array of tools including nonjudicial remedies, state court and creditor advocacy in bankruptcy court. But we also know that any path has to make business sense for our clients, or it becomes part of the problem. If you need help planning for the difficult conversations ahead with your business counterparts, or assessing debt payment proposals and your best alternatives, consider a conversation with us. Having a clear plan and structure in your approach can help make sense out of chaos.