Crafting Solutions for Troubled

Crafting Solutions for Troubled Businesses will change the way you think about the problems of businesses in distress. In this practical (and opinionated) guide to evaluating and addressing the challenges of overleveraged and underperforming companies, the authors provide practical advice regarding key tasks critical to understanding how to maximize the value of a troubled business, including:

Identifying the difference between bad management and a bad business;

Assessing risks and opportunities in order to diagnose turnaround potential;

Determining when replacement of management is required;

Negotiating consensus, support, and a path to mutual benefit among contentious and disillusioned constituents.

Based upon detailed analysis of 100 distressed situations on which they have worked, the authors identify patterns of problems and conclude that financially troubled companies can generally be segmented into one of the following classifications:

Undisciplined Racehorses: Growth businesses that often suffer from isolated and correctable strategic errors or operating deficiencies.

Overburdened Workhorses: Mature, viable businesses with an established market position that have been saddled with excessive debt-service obligations.

Aging Mules: Companies in decline, stubbornly clinging to strategies better suited for the past while being outpaced by nimbler, more flexible competitors.

Using these classifications as a conceptual framework, the authors offer extensive, fact-based problem diagnosis and solution tools, and show how to “separate the wheat from the chaff and maximize the value of each.”

Advance Praise:

"This is an insightful, easy to read download of the broad and deep experiences of two of the turnaround industry's top professionals in the middle market. It is a great introduction to turnaround skills for the uninitiated and a good reminder of key approaches, values, and expectations for even the most experienced in the field. It should be a useful tool for managers, board members, investors, and lenders."

~ Edwin E. Smith: Bingham McCutchen LLP

“Crafting Solutions for Troubled Businesses provides an analytical step-by-step work plan on how to identify and evaluate operational and capital structure challenges at “troubled companies.” The authors bring decades of hands-on experience involving dozens of corporate turnaround situations and have created a valuable playbook for corporate lenders, management, and owners. Whether a company’s challenges are attributed to a changing market, cyclical downturn or ineffective management, this book provides the roadmap on how to assess the problems, evaluate alternatives, and implement the right solution.”

~ Arthur B. Newman: Blackstone Group

“I read this penetrating analysis of the restructuring process with great interest. It provides invaluable insights and observations that will benefit anyone involved in a restructuring. The authors rely upon their decades of experience to provide a wealth of illuminating insights and practical suggestions. Their book will immediately take its place as one of the leading works in its field.”

~ D. J. Baker: Skadden, Arps, Slate, Meagher & Flom LLP

“This is a must read for anyone who sits on a corporate board of directors. It provides practical insights from experienced professionals about how to view and confront management in the face of operational and competitive challenges.”

~ Sharon Manewitz: TIAA-CREF

“Crafting Solutions for Troubled Businesses is an insightful and constructive how-to guide to evaluating and dealing with troubled companies. The sensibilities to management and organizational issues and the fact-based approach to evaluating problems which the authors set forth describe clearly what I attempt to obtain when hiring or recommending turnaround consultants.”

~ Jeffrey P. Fitts: GE Commercial Finance

“Stephen and Douglas Hopkins are masters of the art of moving troubled companies and the people involved with them through distress toward vibrant health. In this book, they provide a valuable, practical road map for all parties affected by the uncertainty of distress, and in a steady, no nonsense voice walk through the steps in the recovery process that are often overlooked in the heat of the moment. Most importantly, they remind us all that, in a world in which advisors and spread sheets proliferate, the people are important, and moving them toward ever greater clarity and unity of effort wins the day.”

~ Deborah Hicks Midanek: Solon Group, Inc.

Stephen J. Hopkins and S. Douglas Hopkins, a father-son team, are founders and principals of Kestrel Consulting, LLC. Each has more than 25 years of experience working with troubled businesses, providing turnaround advisory and interim management services to a broad and diverse selection of middle market companies.

Steve Hopkins started his career with 18 years in financial management positions at the General Electric Company before turning his attention exclusively to assisting financially stressed organizations. Collectively, Steve and Doug have managed or had a major involvement in more than 150 projects, including such major bankruptcy cases as Evans Products, Fairfield Communities, Cuisinart, and Doskocil. Interim CEO assignments have included companies as diverse as Worlds of Wonder (toys), Evans Financial (mortgage portfolio), Cerplex (electronic repairs), MAI-Europe (computers), Pinnacle Brands (sports trading cards), View Tech (video conferencing), Yorx (audio electronics), and Combined States Holding (international shipping).

In connection with their various projects, the authors have completed more than 50 sales transactions involving troubled businesses.

Organization of Information:

I. Conceptual Approach and Key Issues

Sets forth the framework of our approach and discusses our view of key issues that arise in every turnaround or troubled company situation.

II. Managing the Crisis

Discusses the challenges and pitfalls that arise near the zone of insolvency and how critical liquidity issues and conflicting agendas of opposing parties can threaten to derail the pursuit of maximum value. .

III. The Diagnosis Process

Presents the specific diagnostic process actions necessary to obtain a full understanding of a financially troubled company, including its history and trends, competitive situation, internal resources, strengths and weaknesses.

IV. Alternatives and Action Plans

Steps to take related to determining strategy, evaluating risk/rewards, obtaining consensus, cooperation and support, and ensuring that the right management and resources are in place

V. Lessons Learned in 100 Completed Assignments

A distillation of more than 50 years of the authors’ experiences with financially troubled companies. Patterns and perspectives we have found illuminating and instructive.

Interspersed throughout the book, the Authors' offer numerous brief “case histories” to illustrate the practical application of their observations and recommendations.

Selected Key Topics Discussed: