Corporate Restructuring: The Three Types and What Each Fixes
Restructuring covers three different problems that get one name: a business that costs too much to run, a balance sheet that cannot carry its debt, and a legal structure that no longer fits. Fixing the wrong one is how companies lose a year.
The three types, and what each actually fixes
The sequence that works
Cash first, then the plan, then the negotiation. In the first two weeks you need a rolling thirteen week cash forecast that the CFO and the bank both believe. In weeks three to eight you build the operating plan that shows how the business becomes viable. Only then do you go to lenders, because a renegotiation without a credible operating plan is a request for patience rather than a proposal.
What gets cut, and what must not
- Cut structural cost and unprofitable product lines, not the commercial engine
- Protect the people who hold customer relationships and technical knowledge
- Delay capital expenditure that has no payback inside the plan horizon
- Never cut the reporting capability you need to prove the plan is working
Who leads it
A restructuring needs someone who can hold the line with lenders, unions, customers and the board in the same week. That is an operating role, not an advisory one. Where the incumbent CEO is credible and has the energy, they lead it. Where credibility with the lender is already gone, an interim executive is usually the faster route to a signed agreement.
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