Troubled Companies - Introduction

The following text has been prepared by Arthur Lipper III for British Far East Holdings Ltd. and is intended to be part of a book, “Troubled Companies”. No reproduction or publication of these writings is authorized, except with written consent of the author and owner.

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June 1998

Information regarding Troubled Companies

The decision to write this much needed book is based upon a desire to profit from the provision of assistance and value.

As an investment banker and corporate advisor, I am fully qualified by experience to author such a book. Possible titles which will be preferred by publishers include; Learning From Troubled Companies - What Happens When It Isn't Working and Turning Around Troubled Companies. Publishers always believe happy endings sell better, regardless of reality. A more realistic title might be; Fatal Decisions - Why It Didn't Work.

The book will serve as a guide for a wide range of readers, including; private and public company investors, executives, business owners and managers of companies some, of which will be facing perhaps terminal difficulties. Troubled Companies will be of great interest and value to processional advisors including; lawyers, accountants, consultants, financial intermediaries and of course, students of business and their academic instructors.

As well as my own experience I want to capture the observations of bankers, investors, CEO's and those subordinate to the CEO's in terms of their perspectives as to the cause(s) of the problems and what might have been done to remedy the problems.

Also observed will be the ways in which company-based pressures impacted the families of those directly involved. Lots of family members of those pressured by the God(s) of Cash Flow and inadequate profit margins will be benefitted by reading the book and learning that they are not alone. Troubled Companies is intended to be instructive as well as simply being interesting and should become must reading for all involved and interested in business, especially those who are, regardless of age, by definition, students of business. The book is intended to serve a broad readership. Many of the issues discussed will also relate to non-business situations and relationships.

The focus of Troubled Companies is the smaller, more ambitious and daring companies, rather than mammoth companies such as Apple and other giants having lost their way. The analysis and study of businesses of under $200 million in revenue will relate more to the experience of a large body of readers and these stories have not, for the most part, ever been told. Also there is more to learn which may be applicable to the needs of readers by focusing on companies in which individuals and specific decisions are more identifiable as being critical in determining the course of the company.

My intent, as the author, will be to tell the stories in an empathetic manner, one which is non-condemning of the those making the decisions and one which is understanding of the personal stresses caused by fate or poor business judgments. The theme will be "people who fail to achieve their objectives are neither losers nor bad people". I will also try to identify THE decision which was fatal and possibly how it might have been avoided, allowing for a different result than the one which occurred.

Following are some possible chapter descriptions:

• What is the definition of success and when does a lack of success result in failure? Whose definition of success should prevail?
• When stagnancy becomes an acceptable or even desired, non-threatening, virtue and managerial relief. Being stuck in a comfortable rut is "ok" or there are worse things than just being able to make payroll.
• What was the precise moment, in retrospect, when the various parties concluded or perhaps should have concluded, the entity could not continue in its then present form?
• What decisions could or should have been made differently and by which of the players?
• Was there a point when a critical decision could have made a major difference or was the situation such that the vehicle was always beyond repair?
• How does one manage an ailing enterprise differently from a flourishing one?
• Do people make a difference and if so, down to what level?
• How are good people recruited by and attracted to businesses in trouble?
• How are businesses in difficulty financed?
• How much disturbing information and insight is shared with bankers, prospective investors, employees, customers, suppliers - and when?
• Can downsizing ever be really be believed to be progress and if so is downsizing always the first indicia of trouble and possibly recovery?
• When should those having been in office during the commencement of problems have been removed and how?
• What is the role of professional advisors in damage control?
• When is it better to let it all crash and rebuild versus attempting to stave off the inevitable?
• Can there be fun and laughter after hope is destroyed or is there life after corporate death?
• What about the family and those who also believed - based upon love or greed?
• Was one of the contributing factors to the severity of the problems the losing of nerve or will to take chances or the need by those having invested to protect that which had already been lost but was still thought of as an investment?
• How much pressure does it make sense to bear and is it possible to have a balanced life during periods of commercial adversity?
• What would have made it all better and was that ever realistically possible?
• Why didn't a recognition of the problems become known sooner and would it have made a difference?
• What would those involved have done differently with subsequent knowledge?

It is my hope the dialogue being prompted by this "book in works" format and forum will result in a much better and more useful book than one which might have been written without the input, guidance and assistance of readers and participants.

As stated initially, my intent is to profit by delivering a useful and valuable writing to those who are or may be faced with decisions regarding; managing companies, investing in companies or working for companies which are experiencing difficulties. It is usually not easy but in many cases it doesn't have to be fatal.

Thanks for your help.

Arthur Lipper III

Reader comments and suggestions as to specific examples are welcome. All submissions will become the property of British Far East Holdings Ltd. with our appreciation, but without compensation to the party making the submission.

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