by Michael S. Sitrick
(TMA International Headquarters)
Public relations may seem to be an odd discipline to bring
to a Chapter 11—unless youve been through one. "Business as usual" does not
just happen. A great deal of work needs to be done to insure that your workforce
is stabilized and the information flow is controlled.
leading up to and immediately after the filing are often the most
important. Initial perceptions, more often than not, set the tone for the entire
must anticipate the concerns of all who will be affected—employees,
vendors, suppliers, stakeholders and customers—and address them in an effective,
credible and timely manner.
Each of the
companys constituents must be made to understand that Chapter 11 doesnt mean
the company is going out of business or that all of the companys employees will
lose their jobs. On the contrary, they must be told that daily operations will
continue as usual, stores and factories will remain open and transactions which
occur in the ordinary course of business will go on just as
be told that paychecks will be issued at the same time as if no proceeding
had been filed and that normal processing for expenses incurred will take
place, with the exception of expense reimbursement to the highest paid
employees, which would require court approval.
be assured that the company expects to be able to provide them with as good or
better a selection of goods and services as before.
be made to understand that though the Bankruptcy Code precludes payment for
goods and services received prior to the date of filing, merchandise received
post petition is given priority status by the court and that payment will be
made for goods and services received after that date.
and bondholders should be told what happened and why, what the filing means and
what it doesnt mean to them.
involved in more than 30 restructurings both in and out of court over the past
two years. Make no mistake about it. What you say, when you say it and how you
say it, can and does make a difference.
have not properly prepared for filings have had employees not show up for
work, customers cancel orders and vendors refuse to ship. Those who were
properly prepared, on the other hand, have had exactly the opposite
experience. In fact, one retail company we worked with recently had more
than 85 percent of its vendors shipping on terms within a week of its
Chapter 11 can
be viewed as a new beginning or the end. How your company or your clients
company is perceived, is often dependent upon how its filing is