Financial Information Management • 05.26.09
A restructuring solution that is based on erroneous or unreliable information is unlikely to succeed. Every attempt should be made to establish the exact financial position of the company, as well as the credibility of any financial projections. Often this is very difficult and takes considerable time, partly because the lack of reliable information usually contributes to the company’s problems in the first place. Banks must invest all the time that is necessary to obtain reliable information at the outset of the restructuring. It is usually necessary to verify any information produced by the company independently to achieve this. Also, the sharing of information amongst stakeholders promotes trust in the loan workout process.
Anticipation and planning
An experienced banker can anticipate problems and take corrective action before it becomes necessary. To be able to do so, the banker must have sufficient dedicated time and resources to consider all possible options and approach loan workouts in a methodical way. The planning process should also incorporate contingency plans to be implemented in the event of unexpected outcomes. Planning also enables a bank’s resources to be deployed efficiently.
