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Operating a Distressed Business

A Primer on the Chief Restructuring Officer (CRO)

A Brief History of the Chief Restructuring Officer The role of a Chief Restructuring Officer (“CRO”) is approximately four decades old.  While still a somewhat new role in the 1990s, CROs are now ubiquitous in the restructuring community.  Todd Zywicki, a George Mason law professor who specializes in bankruptcy law, traces the origin of the […]


Can an Executive Exert Control of Corporate Attorney-Client Privilege?

What exactly does it mean when a company’s attorneys represent the company, not the company’s executives?  Suppose an executive consults with company attorneys to determine if the company’s course of action is legally permissible.  Months after receiving the legal advice, the company files for bankruptcy.  The executive is also criminally prosecuted over the very actions […]


90 Second Lesson: Personal Liability for Unpaid Taxes in Insolvency Cases

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: Who can be liable for a chapter 11 debtor’s unpaid taxes? ANSWER: One or more persons, including a fiduciary, may be subject to […]


90 Second Lesson: Application of Federal Tax Laws in Insolvency Cases

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: Are insolvent or bankruptcy debtors exempt from federal income tax laws? ANSWER: In general, neither the Internal Revenue Code nor the Bankruptcy Code […]


Optimizing Corporate Workouts With Independent Directors and Special Committees

The appointment of independent directors may benefit a financially distressed business throughout its restructuring process, including during a bankruptcy case. An independent director can be conceived of as having no direct or indirect connection to the business, including not being an employee, owner, or other insider of the business and not deriving any income from […]


Introduction to Distressed Analysis – Developing Your Investment Thesis and Valuation Methods

Ok, time for a more in depth look at making a thesis and a valuation. From the outset, I want to underscore a point raised in my previous article here, that most investors will want to enter the distressed investing space by relying on the expertise of various funds that focus on these types of investments. Thus, I’ll first address here the […]


90 Second Lesson: What will your lender do if you default on a commercial loan?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it.


The Duties of a Chief Restructuring Officer: What Does He or She Do?

Editor’s Note: For a great discussion of options available to struggling businesses, we recommend Help! My Small Business Is In Trouble, a webinar by Financial Poise. When a company is distressed, incumbent management may see the need for restructuring, but also may find itself overwhelmed in tending to day-to-day operational issues plus the demands of a […]


Managing Cash and Stakeholders to Turn Around a Company

Insufficient liquidity shrinks the range of options for a financially distressed business. The metaphor of a melting ice cube is often used to illustrate the situation. When the cash runs out and the company is unable to pay its employees or vendors, the ice cube has melted. The business has failed, and recoverable value has collapsed.


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