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    Ending The Venture

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    ರಾಮಕೃಷ್ಣ ಝಳಕಿ
    This document discusses various strategies for ending a failing venture or business, including different types of bankruptcy and how to successfully exit or transfer ownership of a business. It provides overviews of Chapter 11 reorganization, Chapter 13 extended payment plans, and Chapter 7 liquidation. Prepackaged bankruptcy and strategies for surviving bankruptcy are also examined. The document advises developing an effective exit strategy and succession plan, whether transferring the business to family members or non-family members through a direct sale, ESOP, or management buyout. Throughout, it offers lessons and considerations for navigating bankruptcy or harvesting a business successfully.

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    Ending The Venture

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    ರಾಮಕೃಷ್ಣ ಝಳಕಿ
    241 views23 pages
    This document discusses various strategies for ending a failing venture or business, including different types of bankruptcy and how to successfully exit or transfer ownership of a business. It provides overviews of Chapter 11 reorganization, Chapter 13 extended payment plans, and Chapter 7 liquidation. Prepackaged bankruptcy and strategies for surviving bankruptcy are also examined. The document advises developing an effective exit strategy and succession plan, whether transferring the business to family members or non-family members through a direct sale, ESOP, or management buyout. Throughout, it offers lessons and considerations for navigating bankruptcy or harvesting a business successfully.

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    Ending the Venture

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    This document discusses various strategies for ending a failing venture or business, including different types of bankruptcy and how to successfully exit or transfer ownership of a business. It provides overviews of Chapter 11 reorganization, Chapter 13 extended payment plans, and Chapter 7 liquidation. Prepackaged bankruptcy and strategies for surviving bankruptcy are also examined. The document advises developing an effective exit strategy and succession plan, whether transferring the business to family members or non-family members through a direct sale, ESOP, or management buyout. Throughout, it offers lessons and considerations for navigating bankruptcy or harvesting a business successfully.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    241 views23 pages

    Ending The Venture

    Uploaded by

    ರಾಮಕೃಷ್ಣ ಝಳಕಿ
    This document discusses various strategies for ending a failing venture or business, including different types of bankruptcy and how to successfully exit or transfer ownership of a business. It provides overviews of Chapter 11 reorganization, Chapter 13 extended payment plans, and Chapter 7 liquidation. Prepackaged bankruptcy and strategies for surviving bankruptcy are also examined. The document advises developing an effective exit strategy and succession plan, whether transferring the business to family members or non-family members through a direct sale, ESOP, or management buyout. Throughout, it offers lessons and considerations for navigating bankruptcy or harvesting a business successfully.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 23

    Ending the Venture

    Chapter 17

    Bankruptcy Overview

    Statistics on Bankruptcy

    Frequency
    Breakdown of types

    Lessons from Bankruptcy

    Dont diversify too much


    Bankruptcy only protects from
    creditors
    Can be difficult to separate owner
    and company
    Dont wait too long
    Dont hide it

    Bankruptcy Act of 1978

    Purpose
    Three types of Bankruptcy

    Chapter 11
    Chapter 13
    Chapter 7

    Chapter 11- Reorganization

    Least severe
    Process

    Present case
    Design a plan

    Divide interests

    Extension
    Substitution
    Composition
    If affected, tell how

    Agreement

    Surviving Bankruptcy

    Can be used to restructure and reorganize


    Dont file for Chapter 11, unless you mean it
    Be prepared for creditors to examine
    financial statements
    Understand the process and what is
    protected
    Transfer litigation to bankruptcy courts
    Prepare realistic financial plan

    Prepackaged Bankruptcy

    Settle debts before legal proceedings


    Process
    Creditor Benefits
    Other Applicant Benefits
    Applicant Drawbacks

    Chapter 13- Extended Payment


    Plans

    Sole proprietorship

    Unsecured debt less than $100,000


    Secured debt less than $350,000

    Chapter 13

    Order of priority

    Secured creditors
    Administrative expenses
    Claims from business operations
    Wage claims up to $2000
    Contributions to employee payment plans
    Claims by creditors
    Taxes
    General Creditors

    Chapter 7- Liquidation

    Voluntary v. Involuntary Bankruptcy

    Reorganization Strategy

    Successful strategy

    Prepare a plan
    Sell plan to secured creditors
    Communicate with creditors
    Dont write checks you cant cover

    Keep Venture Going

    Avoid Excess Optimism


    Develop Effective Marketing Plan
    Good Cash Projections
    Know the Market Environment
    Identify Stress Points

    I Have a Bad Feeling About


    This

    Warning Signs of Bankruptcy

    Materials to meet orders are lacking


    Payroll taxes are not paid
    Suppliers demand payment in cash
    Increase in customer complaints

    I Have a Bad Feeling About


    This

    Warning Signs of Bankruptcy

    Lax financial management


    Directors cant explain major transactions
    Deep discounts to customers to get money
    Contracts accepted below standard
    amounts to generate cash flow
    Bank requests subordination of loans
    Key personnel leave the company

    Other Issues

    Starting Over

    Learn from Mistakes


    Dealing with venture capitalists in a new
    venture

    Reality of Failure

    Consult with family


    Consult with professionals
    Dont hang in too long

    Business Turnarounds

    Recognize warning signs and act!

    Have a plan

    Hand on management
    Get out and understand the problem
    Goals and objectives

    Action

    Exit Strategy

    Getting out
    Ways

    Succession by Family Members


    Direct Sale
    ESOP
    Management Buyout

    Succession of Business

    To Family Members

    High failure rate

    Plan components/considerations

    Why?
    Owners role
    Family dynamics
    Income
    Business environment
    Treatment of loyal employees

    Issues

    Succession of Business

    To Non-family Members

    Train existing employees


    Advantages
    Equity issues
    Can take time

    Hire a manager
    Equity issues
    Job description

    Succession in Non-family companies


    Partnership
    Corporations/LLCs

    Harvesting

    Direct Sale
    ESOP
    Management Buyout

    Direct Sale

    Most common harvesting method


    Time and planning
    Payment
    Brokers
    Agreement terms

    Advisory role
    Competition prevention

    ESOP

    Substitutes for pension plan


    Highly regulated
    Advantages

    Motivation
    Loyalty
    Easier transfer later
    Tax deductions

    Disadvantages

    Complexity

    Management Buyout

    Direct sale
    Process
    Methods

    Cash
    Bank
    Note to entrepreneur

    Selling stock

    Advantages

    Why would bank and investors support?

    Public Offering
    Merger

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