Berkery Noyes and Seneca Financial Group have joined to provide restructuring advisory services to companies in the markets we have served for over 20 years. Together Berkery Noyes and Seneca Financial Group can provide the best advice and help implement solutions to financial and operational issues that arise in the current difficult economic environment.

• Under normal conditions, Boards and managements of companies have a fiduciary obligation to protect and maximize shareholder value;
• Under the current conditions in the economy and the financial markets, highly leveraged companies may be entering a “zone of insolvency” sooner than would ordinarily be the case.
• At the point where a company enters a zone of insolvency, the obligations of the board and management shift to protecting the interests of all stakeholders; for privately owned companies, these obligations would fall to the equity sponsors as well.
• Boards and managements who fail to observe this subtle shift in allegiances may find themselves in protracted litigation should conditions not improve and stakeholders experience losses

• In order to adequately protect value in these uncertain times, boards and managements of leveraged companies in the middle markets need to understand:
  • Industry conditions and competitive changes
  • Current valuations for competitors and the implications for their own company
  • Realistic business plans developed using conservative assumptions
  • A thorough understanding of the company’s asset structure, cash generating potential and returns on investments for asset classes
  • A thorough understanding of available options to establish realistic goals and work plans for achieving those goals.

• BNC has focused on certain core markets for over 20 years
  • Individual managing directors have segment focus
  • Knowledge of markets and competitors is key to success of our core M&A business
  • Every transaction consists of:
    • Diligence
    • Valuation
    • Business Plan
  • This knowledge transfers well to working with Seneca to advise companies experiencing problems

• Seneca has successfully helped companies restructure for over 30 years providing advice on:
  • Creating credible business models as the basis for a restructuring plan
  • Maximizing enterprise value and financial flexibility through a capital structure post restructuring
  • Identifying the right level of debt that can be supported consistent with industry practice and ratings objectives
  • If debt to equity conversion is required, what is a “fair” outcome consistent with the enterprise value
  • Valuation of the enterprise and market acceptance of that value
  • Insolvency issues under potential market conditions post-restructuring
  • Maximization of shareholder value under existing market conditions

• A business plan using these skills forms the basis for discussion with third parties
• The plan needs to be carefully built-up by:
  • Understanding the underlying business and its prospects
  • Understanding the cash flows associated with the business and the resulting value
  • Knowledge of the industry so extraneous issues are factored into the plan
• Need to be able to defend the plan to third parties
• Need to act quickly, while options are available
  • Restructurings are time consuming and distractive to management
  • The “need for speed” requires expeditious timing to minimize distractions

• Together we can provide “value added” advice to the Board and shareholders determine and implement the best outcome
  • Develop options based on analysis for the Board, management, and shareholders to consider
  • Creatively explore all avenues to maximize value
  • Help to negotiate and implement the chosen plan:
    • Meet with debt holders and shareholders
    • Defend the proposed plan based on the analysis done
    • Analyze and discuss why other approaches are not as good

You only want to do this once – you need to get it right

In today’s environment, delay in dealing with issues has a huge negative impact on the outcome