Larry Polhill – What Role Do Investment Bankers Play In Corporate Reconstructing


When a company is incurring huge financial losses over a period of time, it may consider undergoing a process of corporate restructuring after consulting all its stakeholders. This helps people operating such an organization to carry out its activities more efficiently and streamline the cash flow position in order to improve its overall profitability. Experts say this is a far better alternative for such an organization than opt for bankruptcy. Under this process, the directors managing such a corporate enterprise files an application with the Courts stating the reasons why it is necessary to restructure the capital of such an organization. On receiving an order, these owners then proceed to hire the services of various professionals to help them to achieve their objective. In the context, investments bankers play a very critical role.

Larry Polhill – Critical role investment bankers play in corporate reconstructing

Larry Polhill, a popular corporate financial professional from Arizona, says it is essential for corporate enterprises restructuring their capital base to hire the services of a reliable investment banker. Such a professional performs a number of important tasks throughout the procedure in the best interests of his/her clients and their stakeholders. If the need arises he/she may also even carry out the functions of a chief financial officer (CFO) during the interim period.

He points out that when a company undergoes the process of corporate restructuring, the role of an investment banker is to carry out the following 3 important functions:

  • Conduct negotiations with creditors and external stakeholders

In any corporate restructuring plan, creditors and other external stakeholders need to appreciate the fact they have to forgo a certain percentage of their claims against the company. When such a corporate organization approaches the courts with such a proposal, it is up to the investment banker to hold talks with them in order to come up with an amicable deal. In many cases, this is a better option to losing all their money if the organization files for bankruptcy.

  • Protect the interest of investors, clients, and vendors

Liquidation and revaluation of some of the assets of the company is an inevitable part of any corporate restructuring program. It helps to raise money to pay off certain external stakeholders who refuse to renegotiate the terms of their existing agreements with the organization. Even investors lose a certain percentage of their money to ensure the organization can carry on its activities. Larry Polhill says investment bankers go out of their way to protect the interests of such internal stakeholders during such liquidation in accordance with the orders of the court. They also have to ensure proper compliance with the guidelines the Securities and Exchange Commission (SEC) lays down.

  • Streamlining the cash flow position and balance sheet

The most important task of the investment banker in any corporate restructuring plan is to streamline the cash flow position of the organization. This includes analyzing the daily operations of such a corporate enterprise and coming up with viable ways to improve its working capital. At the same time, such an expert need to scrutinize the balance sheet and recommend selling certain assets which are not yielding adequate revenue.

A company suffering from huge losses eventually find it difficult to conduct their operations in the marketplace. Corporate restructuring is the only way for such an organization to save its reputation in such an environment rather than file for bankruptcy. This is the why it needs to employ the services of an investment banker with a good reputation in the market.

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