Navigating Restructuring with Caution and Clarity

Don’t pull threads

Hem all round the cut edges with small stitches, being very careful not to pull the thread.

Times, Sunday Times

Deep in the middle of a complex restructure, decisions were made which had an impact and showed good results.  The directors were keen to maximize the benefits and so it was decided to approach creditors and ask them to write-off some of their debt.

“No problem”, said one creditor.  Great news for the directors until the chief finance officer alerted the director to the personal guarantees.  Disaster for the director!

It highlighted a couple of issues for me.

Historical knowledge is useful.  How did we get here?

When you restructure or attempt to fix issues, be mindful.  

Understanding consequences in restructuring – there will always be intended and unintended consequences.  

You want to solve problems once and for all-time sake, and not create a new one, so have a mindful approach to complex restructuring.

Don’t go pulling threads if you don’t know the pattern.  You might just be mending new holes!