Lessons for CFOs Facing Corporate Bankruptcy 

September 11, 2023

Facing bankruptcy can be a daunting experience for any CFO. However, with the right strategies in place, it is possible to make the process easier and navigate through tough times. In this post, we’ll discuss the top ten best practices that CFOs should consider when facing bankruptcy.

  1. Hire Experienced Professionals: One of the most important things a CFO can do is to hire experienced professionals, such as bankruptcy attorneys and financial advisors. These experts can help guide the CFO through the process and help them make well-informed decisions.
  2. Take a Proactive Approach: CFOs should take a proactive approach to bankruptcy and explore all available options before filing. This may include restructuring, negotiating with creditors, or exploring other financial options.
  3. Prioritize Debt: CFOs should prioritize debt and focus on paying off high-interest debt first. This will help to reduce the overall debt and make the bankruptcy process more manageable.
  4. Develop a Bankruptcy Plan: It’s important to develop a bankruptcy plan that outlines the steps to be taken before, during, and after the process. This will help to ensure that everyone involved is on the same page and that the process is managed effectively.
  5. Communicate with Creditors: CFOs should communicate with creditors regularly to let them know of any changes in the company’s financial situation. This will help to build trust and make the bankruptcy process smoother.
  6. Stay Organized: Bankruptcy can be chaotic, but it’s important to stay organized throughout the process. This may involve maintaining detailed financial records and keeping up-to-date on all legal proceedings.
  7. Manage Cash Flow: CFOs should be proactive in managing cash flow to ensure that there is enough money to pay for important expenses. This may involve cutting costs, negotiating with vendors, or exploring financing options.
  8. Keep Employees Informed: It’s essential to keep employees informed throughout the bankruptcy process. This will help to maintain morale and ensure that everyone knows what is happening.
  9. Seek Professional Advice: CFOs should seek professional advice from experienced bankruptcy professionals whenever they have questions or concerns.
  10. Stay Focused on the Future: Finally, it’s important to stay focused on the future and look for opportunities to rebuild the company after bankruptcy. This may involve pivoting the business model or exploring new markets.

Facing bankruptcy can be a challenging experience for any CFO. However, by following these best practices, it’s possible to make the process easier and navigate through tough times.

For additional reading on this topic consider this article by CFODive.com which examines the bankruptcy process at Bed Bath & Beyond and offers lessons learned.

Access the article for additional reading on this topic.