Expect the unexpected
Financial stakeholders often need a “plan B” in case their preferred solution falls through. That’s why contingency planning has become even more important, with more complex capital structures and volatile financial markets. A well designed contingency plan identifies the drivers and relative costs and benefits between a consensual solution and an enforcement-based strategy.
Contingency planning can be used to identify the respective positions and likely outcomes for key stakeholders in an enforcement situation and can be used to benchmark alternative options and provide stakeholders with robust negotiating positions. It can also be used to assess the viability of restructuring through the appropriate insolvency or court-sanctioned processes.
In situations where there are multiple creditor classes, the process of contingency planning is vital for establishing the potential range of outcomes for each creditor group, as well as for identifying the appropriate operational and capital structure for the business going forward.
For leaders looking for the confidence to guide their stressed or distressed businesses through difficult times, Deloitte professionals can help.