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Restructuring (on-line course)

Module 1 – Introduction to Restructuring Principles

When acting as an advisor to a company that is seeking capital, the valuator/corporate financial professional must be able to identify whether the company is “finance-able” or whether the company needs to restructure. This module provides guidance on identifying distressed capital structures and the causes of distress, such as excessive leverage and weak management.

This module discusses:

• The common indicators of financial difficulty;
• Typical strategies in a restructuring situation;
  
• The stakeholders in a distressed situation, particularly the rankings of creditors;
  
• Attributes of forbearance agreements; and
  
• The strategies of banks, mezzanine lenders and equity holders upon entering a restructuring process.

Module 2 – Unconventional Financing and Sale of Business

Financially distressed corporations and their creditors usually require that fresh capital be raised as part of the restructuring effort. By having a thorough understanding of the unconventional sources of financing, the valuator can bring significant value to the table.

This module discusses:

• The sources of capital that are available in a distressed situation, including asset based lending (ABL), debtor in possession financing (DIP), second lien lending and distressed preferred shares;
• The issues that arise when selling a distressed business; and
  
• The tax implications of a restructuring.
   

Module 3 – Nuts and Bolts of Restructuring in Canada – Legislation and People

In carrying out a restructuring process for a distressed company, the valuator must know how to marry the pure restructuring strategy to the business case in order to develop a successful plan for presentation to the company’s creditors. Where the valuator is retained by a purchaser, another important consideration is that the purchaser’s strategies may not be aligned with those of the debtor. In both instances, preplanning is a critical component of the engagement.

This module:

• Provides a general overview of restructuring under the Bankruptcy and Insolvency Act (the “BIA”), and under the Companies’ Creditors Arrangement Act (the “CCAA”), including their similarities and differences.
• Describes the receivership alternatives that can be engaged in a restructuring, including private appointments, court appointments and interim receiverships;
• Discusses the provisions for, and the implications of, conveying assets in a bankruptcy; and
• Addresses special issues which can be part of a restructuring, including the role of a Chief Restructuring Officer, cross-border issues, “stalking horse” bids and reorganizing a company’s capital structure as part of a restructuring.

Module 4 – Marketing and Selling a Business

When an insolvent company cannot restructure its debts or operations within its existing corporate shell, a sale of some or all of its shares or assets is necessary. When all of the assets or business is sold en bloc and the resulting proceeds used to settle with creditors, this is often referred to as a “liquidating proposal” or a “liquidating CCAA”.
A key issue for the valuator in these and similar situations is that time is short and negotiations will take place over days, not months.

This module discusses:

• The methods and timing used in marketing and selling a distressed business;
• The differences in the sale process for the sale of a small business (under $5 million of debt) as compared to the sale  of a larger entity (over $5 million of debt);
• The limited types of representations and warranties provided in a distressed sale and the greater significance of due diligence in these situations;
• The valuation issues in pricing a distressed business; and
  
• The process of closing the deal

• Corporate Finance for Canadian Executives, Johnson, H., Carswell. (Ref.#9780779813544)