Whatever your situation may be, DMG can assist you in navigating through the minefield of options and choices. There is no single choice that is optimal for all business situations.
Diablo Management Group's range of services addresses a variety of business situations:
Asset Sale and Business Closure
Whatever your situation may be, DMG will assist you in creating options and making choices; there may be many options available to your company regardless of your business situation. As an example, if your company is failing, then filing for voluntary bankruptcy (either Chapter 7 or Chapter 11) may not be your best choice. Numerous other options may be available after a DMG evaluation, such as an Assignment for the Benefit of Creditors (ABC) or a managed liquidation. DMG is highly skilled at handling all of these options and others, saving your company both time and money.
DMG typically begins an assignment with an expedited operational review/audit of all or part of your company. We employ a highly-accelerated due diligence process to understand the business, products, people, customers and infrastructure.
You determine what challenges are most pressing, while we learn more about your company and formulate potential solutions. Some typical solutions encountered by DMG are shown in the following chart with pros and cons of each:
|CHAPTER 11 — REORGANIZATION|
|The company is shielded from creditors and can continue to operate under a court approved cash plan and an "automatic stay." Business and debt restructuring may be used to establish company solvency and asset sales are approved by the court.||This is a lengthy process significantly shaped and paced by a magistrate, admin and legal staff, possibly leading to high attorney and admin fees (fees commonly begin at $100,000) leading the company to need a continual source of cash to survive the process.|
|CHAPTER 7 - LIQUIDATION|
|Selling assets becomes possible and the personal liability of officers and directors for running the insolvent company cease to be an issue (USA only). Creditor obligations and all assets and actions are managed by the court-appointed trustee.||This is a lengthy process managed by a bankruptcy trustee where those with prior ownership and management relinquish all control. The company is dissolved while the sale of assets is managed by the bankruptcy court and admin, which is often a slow process. Legal and admin expenses are reduced compared to Ch. 11 bankruptcy.|
|ASSIGNMENT for the BENEFIT of CREDITORS (ABC)|
|The personal liability and responsibility to officers and directors running an insolvent company are significantly reduced (USA only), while the sale of assets can occur quickly without trailing obligations. Creditors are subject to fewer process costs and most contractual obligations can be renegotiated.||The directors of any foreign subsidiary are not protected by an ABC process (with regard to personal liabilities) and creditors may not approve of marketing efforts that would maximize the value of the assets. Also, the completion of tax returns and the termination of corporate obligations are not guaranteed. There is less insulation from involuntary bankruptcy action.|
|The value of assets can be protected by the retention of core personnel and the company retains control of its assets. Operations can continue with creditor agreements in place and creditor priority is managed by the company. Lastly, all statutory obligations are covered in both domestic and foreign in nature.||The sale of assets is more complicated due to past encumbrances and negotiated releases of successor liability are typically required for creditor settlements.|