A Fork in the Road, What Happens When Things Don't Go Right: Considerations for Bankruptcy Protection

By: R. Scott Williams

01.24.19

In an article published in Volume 17, Issue 1 of Energy & Mining International, Scott Williams discusses bankruptcy considerations for power and energy companies.

“How one approaches a fork in the road may make the difference between saving an enterprise or a spectacular crash and fall,” he explains. “Recently, the oil fields have faced pricing pressures that have made energy exploration a losing proposition. The coal mining industry continues to face challenges that segment the economy and challenge the future of it and other fossil fuels. These examples reflect market changes that must be squarely addressed.”

Williams encourages taking immediate action. “As a financial professional, I often see clients who, had they sought counsel six months earlier, I could have provided guidance,” he states “But, when vendors are on a COD basis and the bank is threatening foreclosure, there is little negotiating space to try and craft constructive solutions for a troubled company.”

In the event a company is too far gone, or a holistic approach is not worthwhile, it may be time to consider a more drastic action. “Recently in both the oil and coal industries, bankruptcies and receiverships have become part of the fabric of the economic game,” Williams shares. “A bankruptcy is nothing to be afraid of, but should be entered into thoughtfully and with a plan. Often bankruptcies can result in sales that create ongoing value, protect jobs and continue to provide means to pay creditors. The immediate shut down or liquidation of a business does not serve the stakeholders of a company nor help the economy.”

For the full article, click here.

 
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