WORKING WITH

FINANCIALLY

DISTRESSED

CUSTOMERS

Western Hardwoods AssociationJune 26, 2006Las Vegas, NV

Jim Jensen, CCE, CEW

International Business Credit Consulting

National Association of Credit Management

Oregon – Distressed Business Services

Qualifications

CCE – Certified Credit ManagerCEW – Certified Expert WitnessB.S. Degree – no surprise there!Advanced education - Dartmouth,

Harvard, etc.

THE MOST IMPORTANT IS

Q B E

The rest doesn’t mean anything without this

We’ve all earned it or we wouldn’t be here

Can’t be gained except through hard work

QUALIFIED

BY

EXPERIENCE!

The Team

List CEO and key management by name.

Include previous accomplishments to show that these are people with a record of success.

Summarize number of years of experience in this field.

NACM OREGONDISTRESSED BUSINESS SERVICES

Mission Statement

The mission of the NACM Distressed Business Services is to assist and facilitate in the return to profitability of a business that is experiencing temporary financial distress.  As a member owned association of business credit professionals, it is incumbent on us to use our knowledge and expertise as best we can to work with all parties in restructuring a company.

In those situations where it is not possible to rehabilitate the company, it then becomes our responsibility to assist in an orderly liquidation of the business and its assets, protecting the interests of both the secured and unsecured creditor community..

NACM OREGON SERVICES

Credit ReportsIndustry Credit GroupsCollectionsEducationDistressed Business ServicesAccounts Receivable AnalysisCredentia Staffing Services

DISTRESSED BUSINESS SERVICES

ASSIGNMENT FOR BENEFIT OF CREDITORS

RESTRUCTURING

APPRISALS, AUCTIONS AND LIQUIDATIONS

ACCOUNTS RECEIVABLE ANALYSIS

Distressed Business Services (continued)

REPRESENT INDIVIDUAL CREDITOR ON UNSECURED CREDITORS COMMITTEES

SECRETARIAL AND ADMINISTRATIVE SERVICES FOR CREDITORS COMMITTEES

FACILITATE PREPACKAGED BANKRUPTCY

ABILITY TO TALK WITH OTHER CREDIT PROFESSIONALS IN THEIR “OWN” LANGUAGE

BANKRUPTCY ALTERNATIVES

Extensions or Settlements

General Assignment for Benefit of Creditors

General Assignment for Benefit of Creditors

EXTENSIONS OR SETTLEMENTS

Functions like a Chapter 11 Reorganization

Meeting of creditors is calledUCC-1 executed to prevent run to

courthouseCreditor’s committee formed, equitable

plan formulated

Creditor’s vote on acceptance of workout plan

Implement and fund plan, distribute pro-rata payments, close case

Flexible = speed, less cost, efficient

Plan can be used as a reorganization plan in a pre-packed bankruptcy if a hostile creditor group attempts to stop the workout plan

Functions like a Chapter 7

Disinterested 3rd party acts as fiduciary

Assets sold, usually at auction

Sales done for cash which speeds distribution

All other assets converted to cash

Distribute available funds pro-rata, close case

Does not provide discharge of debts

GENERAL ASSIGNMENT FOR BENEFIT OF CREDITORS

PREPACKAGED BANKRUPTCY

WORK WITH MANAGEMENT AND COUNSEL IN THE

INITIAL PROCESS (I.E. PREPARING AND MAILING

OF NOTICES)

FACILITATE THE ORGANIZATION OF THE

CREDITORS COMMITTEE

ASSIST IN NEGOTIATIONS BETWEEN CREDITORS

AND DEBTORS

ASSIST IN PREPERATION OF REORGANIZATION

PLAN(S)

CHAPTER 11 BANKRUPTCYReorganization

Debtor in Possession Potential for survival Ability to make payments Settlement options

Sale of business units

Liquidation of assets

No longer option for many small to medium sized

business.’

CREDITORS COMMITTEES

REPRESENTATION OF CREDITOR ON COMMITTEE

SERVE AS COMMITTEE SECRETARY

SERVE IN AN ADVISORY CAPACITY TO COMMITTEE

MEMBERS

ASSIST IN PREPARATION AND/OR REVIEW OF

REORGANIZATION PLAN(S)

SERVE AS AN EXPERT WITNESS ON PREFERENCE

ISSUES

General Assignment Liquidation

3rd party acts as fiduciary

Sale of assets (auction)

Cash sales – speeds distribution

Chapter 7Liquidation

Sale Of Business

Preference Actions

Auctions

Liquidations

Ultimate discharge of all dischargeable debts