practice areas
Empowering Success Through Strategic and Creative Enhancements
Discover tailored solutions at Liuzza Management Consulting. From crisis management to strategic planning, operational excellence, and more, our specialized services enhance growth and resilience.
Focus Areas
At Liuzza Management Consulting, we offer specialized services across key practice areas to address diverse business needs:
- Operational Performance Improvement
Cost Reduction: Developing specific programs, implementing them, and following up.
Collaborate with staff responsible for implementing and overseeing the current cost control systems to obtain their input, then work with upper management to test proposed changes, make adjustments as needed, and make final decisions.
Brainstorm with upper management on related topics such as personnel, training, and marketing.
- Strategic Planning
Objective study, with senior management, of the company’s strengths, weaknesses, opportunities, and threats as the basis for determining strategic alternatives
- Interim Management/Crisis Management
Provide immediate CEO, CFO implementation, or debt/equity restructuringanalysis, sourcing, and implementation (CRO) services
- Debt Restructuring/Lender Relationships
Reestablishing the credibility and confidence of creditors and other stakeholders based on their respect for their client/customer’s engagement in outside professional involvement that, hopefully, will improve the probability of a beneficial outcome. Often, in this situation, bankers insist that the client engage a turnaround consultant. they usually strongly recommend that the company find and engage a turnaround consultant within a certain time limit. To avoid other legal risks, if that demand is not met, they generally present three turnaround consultants, demanding that the borrower select any one of the three. That is usually done in more financially sophisticated markets than the Deep South.
“Out-of-Court Settlements.” An out-of-court settlement involves creating a plan to reorganize the debt payment schedule to accommodate all major creditors, aiming to turn around the company’s future. The goal is to persuade major creditors to provide short-term relief to the debtor, allowing the debtor to overcome its current challenges. This benefits the creditors by increasing the likelihood of eventual repayment. Individual creditors are more inclined to agree if the plan is contingent upon all similarly situated creditors also participating. This is generally seen by creditors as a favorable alternative to the risks associated with a Chapter 11 filing. (See Deep River Logistics, HHH Trucking, and Sizzler in Case Studies for more information).
- Bankruptcy
Pre-bankruptcy planning and organizing to effectuate an efficient and successful outcome.
Initiating alternative planning and strategies prior to engaging and considering bankruptcy counsel.
Early review to consider the probability of the relatively unknown alternative of a Prepackaged Chapter 11 (a “Pre-Pak”) that could potentially lead to significant savings and a shorter duration. (See the case study entitled Piccadilly Turnaround/Disaster).
Assist in controlling bankruptcy attorney fees and accelerating the development of the Plan of Reorganization.
The Chief Restructuring Officer (CRO) serves as the main point of contact between the CEO, CFO, and the attorneys during the Chapter 11 process. Often, the CEO and CFO become heavily involved in the bankruptcy, leaving them with considerably less time for the company and their personal lives. The CRO helps facilitate communication between the lawyers and company executivesand assists in educating the lawyers about the company and the impact of their recommendations and alternatives for the debtor.
Scroll down to the section belowfor guidance in selecting bankruptcy law firms.
- Creditor Representation
Advisingcreditor committees or major creditors.
Solutions for lenders with clients in violation of covenants
Guidance on Selecting and Not Selecting Bankruptcy Lawyers, v21
(This is the author’s opinion and is intended to cover the two extremes and provide a framework within which most bankruptcy law firms fall.)
- Big picture on the primary elements of Chapter 11 bankruptcy
a. When a company, the ”Debtor,” files for Chapter 11 bankruptcy, its law firm immediately files numerous necessary documents, setting up the bankruptcy process, which usually includes allowing the debtor to still be controlled by its existing management, hence Debitor-in-Possession or “DIP.”
b. The next fundamental major goal of Chapter 11 is that the debtor commences designing and negotiating with its creditors a Plan of Reorganization, to which significant creditors and the court must agree in order to confirm the Plan. By doing so, the debtor can successfully exit Chapter 11 with a newly restructured company.
c. If such a Plan cannot be agreed upon by the appropriate creditors and approved by the judge, then the judge eventually will likely order the company and/or its individual assets to be sold according to specific directions from the court or at a selling process by an appointed trustee through Chapter 7. Additionally, the court could appoint a Chapter 11 trustee to take control of the entire DIP to either reach a Plan of Reorganization or to liquidate it.
- Creditor-oriented bankruptcy firms:
a. The goal of Chapter 11 attorneys for the debtor should be to create and gain acceptance of a Plan of Reorganization at the lowest possible appropriate cost to the debtor. Yes, there are considerable legal issues that must be dealt with. However, achieving agreement on a Plan of Reorganization eventually becomes more of a negotiation (sometimes even creative) process, not simply a legal process. In other words, to cease primarily arguing the law and focus primarily on making deals with creditors before the debtor is about to go “off its financial cliff,” to the detriment of all parties involved.
b. Used here, a “creditor-oriented” law firm is one that, in Chapter 11 cases, generally specializes more in representing its already-existing clients for collecting accounts receivable or defaulted loans from a debtor that had already filed Chapter 11. Not included in this category are firms representing claimants in suits for damages caused by the debtor. An extreme example when these creditor-oriented firms represent the debtor side in Chapter 11, these clients are sometimes internally referred to as “throw-away” clients that might not survive.
c. Creditor-oriented law firms representing DIPS typically file motions and continue arguing new versions of these legal issues in open court, leading to increased legal fees due to additional series of motions and responses and paying multiple times for the related debtor and creditor lawyers participating in the hearing on that same issue. Sometimes in other businesses, this is called “churning the account.”
d. When representing the debtor, these creditor-oriented law firms often lack the motivation to be efficient or impressive in serving the debtor side. For example, they often are accused of returning these clients’ calls and messages last. They typically continue this process earning more fees, until they reach the debtor’s “wall,” meaning the client is almost out of financial resources to fund the Chapter 11 case further. At this point, the creditor-focused firms then shift their attention to reaching agreements with creditors, hoping that it’s not too late to approve a Plan acceptable to the debtor. If not, the judge is likely to give up and either convert the case to a Chapter 7 liquidation or assign the case to an independent Chapter 11 trustee from outside.
e. When representing creditors, the creditor collection side of the bankruptcy function is mostly repetitious, mechanical, “left-brain,” easy fee-generating work.
f. When these same creditor-oriented firms represent debtors in Chapter 11, their financial incentive is to staff their bankruptcy departments with the lowest-talent lawyers, leaving their sharpest lawyers to focus on solving other long-term creditor client problems to retain their business.
g. They rarely provide their debtor clients with a “game plan” to expedite plan approval, a legal fee budget, or a “critical path” with accountable timelines for success.
h. Providing prompt and attentive service to their “throw-away” clients is rarely among the top priorities.
i. Potential conflicts of interest are usually reviewed and/or disclosed to clients prior to signing engagement agreements. The increasing length of many Chapter 11 cases often lends to new conflicts of interest within and outside of the case. These are often difficult to identify and neutralize well into the case and can grow into major problems for both sides with detrimental repercussions.
- Debtor-oriented bankruptcy firms:
a. When representing the DIP in Chapter 11, their primary focus is generally on finding solutions quickly rather than risking the liquidation and loss of the client.
b. They acquire their new Chapter 11 clients primarily by referral. As a result, establishing a reputation for successfully achieving economical Plans of Reorganization is crucial for their new business development.
c. Their mindset is more likely to be focused on quickly finding solutions to the problems that the client and its executives, CPAs, and lawyers were unable to solve.
d. In Chapter 11 cases, clients often reach a point where they have used all available resources and expertise to avoid embarrassment, costs, and customer losses before filing. They have hit their “wall” already.
e. Therefore, the debtor’s attorneys must be motivated, skilled, and experienced at finding previously “impossible” solutions quickly and urgently to earn a winning reputation.
i. At that point, their immediate focus must be saving the client from liquidation or failure.
ii. They must have already connected with their clients, learned more about them, brainstormed with them, found alternatives to present to creditors, and sometimes take appropriate risks.
iii. If there is no success there, then use the bankruptcy laws and rules creatively to attempt to mitigate the damage.
iv. They have no choice but to promptly apply their best brains and group thinking to find such alternatives.
v. Therefore, primarily creative (right-brained) collective thinking and personnel must be applied to these challenges to outsmart their (left-brained) linear-thinking opposing lawyers.
vi. They, like their debtor clients, must be in “crisis” mode also.
vii. Promptness in client service is important for quicker client decisions and feedback on the lawyer’s ideas and recommendations.
viii. Debtor-oriented bankruptcy law firms, therefore, live in “another world” from creditor-oriented bankruptcy firms.
f. As a result, the management of the debtor must aggressively create and/or find this “other world” prior to a final law firm selection!