Financial Turnarounds: Preserving Value

Chapter 5. Comparison of Turnaround Methods

Turnaround management can be divided into two categories: short-term crisis management and long-term strategic management. A company in or near bankruptcy needs short-term crisis management to survive. Consultant Abraham Getzler explains, “Our clients often are like patients who just have been wheeled into an emergency room. First we have to stop the bleeding. Until the patient stabilizes, we don’t have time for a scientific approach.”

Yet, crisis management can solve only immediate problems. Sometimes reorganization is required which can be accomplished informally, i.e., outside the courts, or through the formal bankruptcy process. The causes and ultimate solutions for financial difficulty, however, ...