Being The Second Expert In
I recently began work on a client who had hired an “expert” before we got involved. This man knew a few of the right moves to make and because he is a tax expert he decided he could do workouts. The problem with a tax expert, or a legal expert, or even a banking expert doing a workout is they are not workout experts and not even turnaround specialists.
To successfully complete a workout, it should be used as a tool, the last resort when turnaround has failed. To do a workout you need to know the specific requirements of workouts and the requirements of the creditor, be it SBA, secured debt, unsecured, vendor, etc. Most importantly, although our clients need a soldier to battle out the issues, in all cases the workout is also what the bank wants, even if they don’t know it. A workout is better for the bank and the client both as each side gets more of what they need. The bank actually ends up with a higher net return from the liquidation of collateral and the client gets rid of the unmanageable debt load.
In the case of this client, the representative involved before I was called failed. He did not know how to accomplish what was needed and wasted valuable time and resources to no end. This does not even address the fact that this client was vetting out Second Wind and not keeping an eye on the man she had hired to help her, so he stopped talking to the bank and now we have to step into a nasty, easily avoidable, legal issue. The effect a representative has on the workout is profound and it can be very difficult to be second in line if the first person did not achieve the perceived value the bank expects and is now asked to work with another third party.
I do not know what this gentlemen did or said and it could have severely tainted the banker’s opinions of my client and even me, as he could view all her representatives the same. It is critical when a client sees the cliff ahead, that they call the right representation and do not confuse lawyers and accountants as workout or turnaround specialists. Real specialists in this field are few and hard to find, hidden behind the scam artists and wannabe professionals. We are all frequently painted with the same broad brush. Evaluate and hire once, this works. Most companies worth being involved with have references to call. Use them.
When you pick someone to represent you, ask questions and find out real information. What is their success rate? Do they have references you can speak to? Will they meet you in person? What skills or knowledge leads them to believe they will succeed where most would fail? If they cannot answer your questions then you may want to keep shopping. It is always better to have a representative come out of the gate with professionalism and experience to create their own first impression instead of being the second man in, which forces your new representative to fight from a double negative position, your issues and the issues left by the previous expert.
Do it once and do it right.
