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In The News

I Just Need More Money


What is a recurring theme that you hear in meetings with clients?

We quite consistently are told “I just need more money”. 

Based on our experience, “needing more money” is a symptom of some underlying cause.

The reasons for requiring additional working capital are myriad. Some are positive while others can be indicative of serious underlying issues such as:

  • We have been awarded a large contract or our revenue has unexpectedly spiked;
  • We plan on moving to a new, larger location to accommodate growth or are pursuing expansion;
  • We are a victim of fraud;
  • We are facing a lawsuit or a tax reassessment;
  • We are experiencing declining profit margins / suffering significant recent losses;
  • We entered into an unprofitable contract (excessive warranty claims, excessive product returns, cost overruns);
  • We over expanded;
  • We have a large outstanding account receivable;
  • We are stuck with obsolete or slow moving inventory;
  • We are behind in payments to the tax authority (payroll deductions, sales tax);
  • We can’t make payroll; and
  • We are not prepared for a fundamental change in our industry, we must reinvent or liquidate.

So what happens next?

Whatever the cause giving rise to the need for more money, the important point is identifying it as a problem or an opportunity. Often these are two sides of the same coin.

We meet with management, operations, sales and other relevant divisions of the company to gain an understanding of the current situation.

If we discover a problem:

  • Is it one-off or recurring?
  • Can it be fixed?
  • How much damage has occurred?
  • Does management have the resources available to fix the problem?
  • Do stakeholders still have faith in management?

If it is an opportunity:

  • How to best take advantage of it?
  • How to avoid common pitfalls?  

Most often management is aware of the issues but may not appreciate exactly how cash flow is being impacted. Management, dealing with the day to day thrust of operations -the micro view- can lose sight of the big picture.  As an independent advisor we bring a fresh perspective and a full toolbox.

Interesting, but your team is comprised of Bankruptcy Trustees, doesn’t that mean you only practice in forced liquidation situations (receivership / bankruptcy)?

Absolutely not!

First and foremost we are designated accountants and Chartered Insolvency and Restructuring Professionals (“CIRP”). Being Trustees in Bankruptcy is better described as one of the “tools” in our toolbox.

Our preference is to maintain an entity as a going concern; employees with jobs, landlords with tenants, suppliers with customers and shareholders with share value. Indeed that is not always possible.  However, in all cases we strive to maximize returns for relevant stakeholders.

Our varying professional experience and credentials provide a complementary toolbox of skills which are helpful in solving difficult business issues. Collectively we have encountered many “lessons learned the hard way” which can be applied to assist businesses in identifying and addressing problems or taking advantage of an opportunity.

What do you mean by restructure?

Simply stated, there are two broad types of restructuring, informal and formal. The scope of issues present and number of creditors usually determines if an informal or formal restructuring is the practical solution.

If a formal restructuring (statutory driven) is the solution, it is helpful to be proactive and to ensure you have sufficient financial resources to successfully restructure your affairs. In order to successfully restructure a business, the underlying business must be viable.

Essentially, there must be something worth saving.

The end game of either informal or formal restructuring is to amend the terms of current obligations or seek some form of debt forgiveness.


By: Jonathan McNair, Partner of Insolvency & Restructuring, Wolrige Mahon LLP

Disclaimer: The information provided in this article is intended for general purposes only. Care has been taken to ensure that information herein is accurate; however no representation is made as to the accuracy thereof. The information should not be relied upon to replace specific professional advice.