WORKING WITH FINANCIALLY DISTRESSED CUSTOMERS

Western Hardwoods AssociationJune 26, 2006Las Vegas, NV

Jim Jensen, CCE, CEW

International Business Credit Consulting

National Association of Credit ManagementOregon Distressed Business Services

QualificationsCCE Certified Credit ManagerCEW Certified Expert WitnessB.S. Degree no surprise there!Advanced education - Dartmouth, Harvard, etc.

THE MOST IMPORTANT IS

Q B E The rest doesnt mean anything without this

Weve all earned it or we wouldnt be here

Cant be gained except through hard work

QUALIFIED BYEXPERIENCE!

The TeamList CEO and key management by name.Include previous accomplishments to show that these are people with a record of success.Summarize number of years of experience in this field.

NACM OREGONDISTRESSED BUSINESS SERVICES

Mission StatementThe mission of the NACM Distressed Business Services is to assist and facilitate in the return to profitability of a business that is experiencing temporary financial distress. As a member owned association of business credit professionals, it is incumbent on us to use our knowledge and expertise as best we can to work with all parties in restructuring a company.

In those situations where it is not possible to rehabilitatethe company, it then becomes our responsibility to assist in an orderly liquidation of the business and its assets, protecting the interests of both the secured and unsecured creditor community..

NACM OREGON SERVICESCredit ReportsIndustry Credit GroupsCollectionsEducationDistressed Business ServicesAccounts Receivable AnalysisCredentia Staffing Services

DISTRESSED BUSINESS SERVICESASSIGNMENT FOR BENEFIT OF CREDITORS

RESTRUCTURING

APPRISALS, AUCTIONS AND LIQUIDATIONS

ACCOUNTS RECEIVABLE ANALYSIS

Distressed Business Services (continued)REPRESENT INDIVIDUAL CREDITOR ON UNSECURED CREDITORS COMMITTEES

SECRETARIAL AND ADMINISTRATIVE SERVICES FOR CREDITORS COMMITTEES

FACILITATE PREPACKAGED BANKRUPTCY

ABILITY TO TALK WITH OTHER CREDIT PROFESSIONALS IN THEIR OWN LANGUAGE

BANKRUPTCY ALTERNATIVESExtensions or Settlements

General Assignment for Benefit of Creditors

General Assignment for Benefit of Creditors

EXTENSIONS OR SETTLEMENTS

Functions like a Chapter 11 ReorganizationMeeting of creditors is calledUCC-1 executed to prevent run to courthouseCreditors committee formed, equitable plan formulated

Creditors vote on acceptance of workout plan

Implement and fund plan, distribute pro-rata payments, close case

Flexible = speed, less cost, efficient

Plan can be used as a reorganization plan in a pre-packed bankruptcy if a hostile creditor group attempts to stop the workout plan

GENERAL ASSIGNMENT FOR BENEFIT OF CREDITORSFunctions like a Chapter 7Disinterested 3rd party acts as fiduciaryAssets sold, usually at auctionSales done for cash which speeds distributionAll other assets converted to cashDistribute available funds pro-rata, close caseDoes not provide discharge of debts

PREPACKAGED BANKRUPTCYWORK WITH MANAGEMENT AND COUNSEL IN THEINITIAL PROCESS (I.E. PREPARING AND MAILING OF NOTICES)

FACILITATE THE ORGANIZATION OF THECREDITORS COMMITTEE

ASSIST IN NEGOTIATIONS BETWEEN CREDITORSAND DEBTORS

ASSIST IN PREPERATION OF REORGANIZATION PLAN(S)

CHAPTER 11 BANKRUPTCYReorganization Debtor in Possession Potential for survival Ability to make payments Settlement options

Sale of business units

Liquidation of assets

No longer option for many small to medium sizedbusiness.

CREDITORS COMMITTEESREPRESENTATION OF CREDITOR ON COMMITTEE

SERVE AS COMMITTEE SECRETARY

SERVE IN AN ADVISORY CAPACITY TO COMMITTEEMEMBERS

ASSIST IN PREPARATION AND/OR REVIEW OFREORGANIZATION PLAN(S)

SERVE AS AN EXPERT WITNESS ON PREFERENCEISSUES

General Assignment Liquidation3rd party acts as fiduciary

Sale of assets (auction)

Cash sales speeds distribution

Chapter 7LiquidationSale Of Business

Preference Actions

Auctions

Liquidations

Ultimate discharge of all dischargeable debts