Managing the Decline - The Role of the General Counsel in a Faltering Company

Abstract

In the current complex business environment, the vast majority of companies who must sell themselves to preserve some remaining value, or those who fail to sell and experience either a Chapter 11 or Chapter 7 bankruptcy, arrive there through a series of events rather than sudden business failure. Whether it is the failure of management to contain costs over a long term, or the loss of a critical client that causes a business to fail, the General Counsel’s role in a faltering company is essential to successfully preserving value and preparing the company for a bankruptcy that can return value to creditors and if truly successful, even deliver value to shareholders. This must all be done at a time when resources for outside professionals are limited and even retaining company employees could prove difficult. Quite simply, the GC many times becomes the center of activity during a turbulent time and forethought and preparation can be the difference between being the eye of a storm or merely part of the hurricane.