The bankruptcy storm is coming. Here are four critical strategic communications rules to survive it.
InfoAndInfluence.com -- The New York Times predicts a “tidal wave” of Chapter 11 bankruptcy reorganization filings resulting from the pandemic’s devastating impact on our nation’s economy.
Terrible enough. But here’s the bigger problem: Experts believe that bankruptcy courts will be so swamped that they won’t have time or resources to protect many companies worth saving, especially small to medium-sized enterprises (SME).
These companies must place even greater emphasis on the strategic communications function to manage their bankruptcy’s complex information requirements, crisis, controversies and related PR strategies.
Obviously, protecting a company’s enterprise value during Chapter 11 is in the best interests of creditors, and helps operations continue. That’s why bankruptcy judges often approve the hiring of bankruptcy litigation communications experts* to oversee a comprehensive communication plan and work alongside the lawyers and accountants.
If your company or client is part of the coming Chapter 11 storm, here are four strategic communications considerations that every executive leader must take into account:
DOING IT BADLY WILL COST YOU BADLY … Your company’s hard costs, disruption and reputation damage will increase exponentially if you get bankruptcy litigation PR wrong. This is a complex arena that demands long, detailed interaction with legal and accounting teams -- not to mention having a precise understanding of what, how and when something can and can’t be disclosed.
HELLO WE MUST BE GOING (UNDER) … For SME companies, bankruptcy litigation communications and PR is even more critical to surviving the process. That’s because the Chapter 11 filing may be the first time that most judges, reporters and other people have ever heard of them.
Add to this the fact that an astonishing percentage of ill-informed local influencers -- social media gadflies, non-financial reporters and anchor-people – assume that a Chapter 11 reorganization is the same as a Chapter 7 liquidation.
REPORTERS YOU WON’T INVITE FOR DINNER … Editors and reporters that cover corporate bankruptcies are smarter, more suspicious and aggressive than general business media or trade press. They know how to read court filings, have equally-suspicious expert resources and will interview your creditors. And they don’t care that your company supports local charities.
If your company has a PR agency or in-house staff whose job is to generate positive marketing publicity, then the rule is this: Keep them away from bankruptcy and litigation reporters. It’s a whole different game.
THE PARTNERSHIP MUST WORK … Your bankruptcy legal and crisis PR team must work together to achieve a challenging multifaceted objective: To address court, compliance and creditor concerns while simultaneously translating a complex, impersonal procedure in ways that humanize the issues, protect enterprise value and position the business to re-emerge successfully as a going concern.
Good luck out there.
InfoAndInfluence.com is written by Steven Silvers and Paul Jacobson, founding partners of SilversJacobson Crisis Management & PR Strategies. Mr. Jacobson's bankruptcy expertise goes back to when he served as communications director and spokesperson for one of the nation’s largest, most complex and high-profile corporate bankruptcy reorganization, which was successful in paying off $17 billion in debt while saving some 14,000 American jobs.
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