Identify Options. Negotiate Solutions.
RCBC's mission is to help navigate the complexities that owners, boards of directors (public or private), CEOs, and special committees of companies face when they are in distressed, underperforming, or uncommon situations. Our services address the unique situations each company can face and work with respective stakeholders to find workable solutions.
Distressed Situations
The performance of even the strongest and most established companies can become challenged, often with little warning. Causes of distress can include: cost pressures, increasing competition, changing demand, technological change, a declining industry outlook, commodity cycles, developments in the global economy, or an unforeseen shock. In these instances, time can be a company’s friend or enemy. The sooner a business actively addresses its faltering performance, the more options it will have to implement and maintain control.
When the status quo is just not an option RCBC has proven experience in leading companies and their management teams through a turnaround. We quickly and accurately assess a situation in order to develop options that can facilitate a stabilization of an organization’s finances and operations. Providing a new perspective on how to evaluate risk versus reward, we can help management clarify its priorities. Building a clear set of communications, we also help manage key stakeholders so companies can provide the reassurance required to gain support and the much-needed time to steady the business and protect its value.
Liquidity Crises
Nothing is more damaging to the viability of a business than when liquidity is at risk. Whether the crisis is company-specific, or driven by external economic factors, a loss of lender or investor confidence can be the catalyst that brings a company down, or permanently damages its value.
RCBC works with management toward regaining the trust of key lenders and other stakeholders to maintain or raise additional sources of funding. To ensure a sustainable liquidity position we develop an aggressive game plan to manage a company’s short-term needs in order to evaluate the root causes of the problem and develop a plan of action. We also work to improve an organization’s cash position by developing regular liquidity forecasts, which allow for specific actions to be taken and to proactively manage key stakeholders with consistency and a plan.
Business Underperformance
The root cause of a company’s financial issues, and concern over its balance sheet, can often be traced back to operational underperformance and a failure to meet expectations. Obtaining the appropriate perspective on these causes, and developing a realistic operational response which can be properly communicated, is critical in obtaining the necessary support for any liquidity or capital structure needs.
Drawing on our variety of experiences, including as management, senior executive, advisor or board member, RCBC works with companies, their management, advisors and boards to bring objective oversight in assessing operating issues and their corresponding solutions.
Stakeholder Management
Organizations have multiple stakeholders, including customers, shareholders, employees, suppliers, unions, lenders and other creditors. At a time of crisis or underperformance, the conflicting demands of these many stakeholders can put tremendous pressure on a company and its management team. The expectations of stakeholders, and the company’s commitments in response to those expectations, need to be managed appropriately. Without the support of these stakeholders and a proactive plan to navigate through the issues, it can be extremely difficult for management to execute its business strategy and maintain, or enhance, the firm’s long-term value.
RCBC’s extensive experience can provide a comprehensive assessment of each stakeholder group and the leverage they can respectively bring to bear in given situations. We analyze how their individual interests intersect with the company, and each other, in order to lay the important groundwork for managing expectations. We then work with organizations to prepare a strategy that recognizes the management of key stakeholders as a priority, while making sure the organization has the time it needs to execute its turnaround.
Financial Stakeholders
Financial stakeholders are often the first to be aware of, and connect with, the company when financial underperformance becomes apparent. These stakeholders are typically well organized and will quickly respond to the situation.
It is extremely important for a company to be organized and efficient in managing these groups and in providing accurate, timely information in a controlled and consistent manner. RCBC is well-versed in dealing directly with financial stakeholders and assisting management in developing its overall strategy and approach.
There are many situations which involve and activate groups of stakeholders, who are beyond financial in nature, and who the company may not be accustomed to dealing with on a regular basis. This is particularly true in situations involving legacy costs, contingent liabilities, or atypical, off-balance-sheet matters. Oftentimes, successfully managing these unique stakeholders can provide the key to the ultimate restructuring, financial or otherwise.
Labour
Organized labour can be an extremely important stakeholder to consider during a company’s period of distress or ultimate restructuring. Often, professionally-advised labour will require a fully informed analysis of the situation and will develop their own point of view.
RCBC has experience in many situations where organized labour has been an important consideration and a key stakeholder. Not to be confused with the company’s employees; we understand that a solution that provides an acknowledgement of organized labour groups can be a critical ingredient to a successful outcome.
Pension Plans
Registered and supplemental non-registered plans have taken on an increasingly important and vocal role in recent restructurings. Legacy liabilities take on additional scale, relative to the size of the business, when a company’s earnings performance is under stress. The triggering of these issues activates additional stakeholders and intersects with regulatory oversight in a manner that is much more visible and material than in the past.
Long overdue, these stakeholders and the issues connected to them increasingly intersect to form part of the overall strategy for a company during its restructuring efforts. RCBC has the proven experience in working with pension plans and other parties at the table to manage the negotiation of mutually agreeable solutions that move a company forward.
Regulatory Agencies
Regulatory agencies may become activated for many different reasons when a company experiences financial hardship or discovers it is non-compliant. Whether the nature of the issue involves oversight or material change, RCBC works with clients and their outside legal counsel to both develop strategies and assist in negotiating acceptable solutions.
Parties to Litigation
Material litigation, if successful, can threaten the viability of a company or at a minimum add significant risk to the way the company is evaluated and valued by its lenders and investors. Litigation is used as a tactical tool which often represents only a small part of broader issues which may be at play in any one situation. By design, material litigation can sap the time and energy of senior management, reducing their ability to focus on business priorities.
RCBC knows that understanding the role of the litigation as part of a broader set of issues and circumstances is critically important in developing a strategic approach to resolution and not simply a tactical defense. We provide oversight with a fresh set of eyes, without history or bias, which can be valuable in evaluating the best navigational approach through a situation. An experienced business resource, we help to manage and assess the combination of legal and business issues and can provide a more effective way to manage this lengthy and expensive process.