Business Workouts Can Help Companies Recover
Last updated on March 12, 2025
A business that has gone through a time of poor performance may require a turnaround – an overarching strategy for restructuring its management and operations to enable it to return to profitability. Through analysis, assessment and planning, a turnaround can restore a struggling business to solvency. Examples of turnaround methods may include cutting expenses, eliminating product lines and managing with lower levels of capital.
A business workout, on the other hand, refers to specific financial moves, such as restructuring lending relationships or overcoming debt burdens to increase equity. Our attorneys at Aaronson Schantz Beiley P.A., in Miami, Florida, often work with businesses that are laden with debt due to outside circumstances, such as weather events, personal health matters, business cycles and, presently, the cessation of business activity due to the coronavirus. Business turnarounds and workouts can provide answers and allow a business to move forward and beyond the time of trouble.
Our lawyers at Aaronson Schantz Beiley P.A. have developed a reputation for achieving business turnarounds in the legal and business community of South Florida and beyond. Negotiating settlements and workouts helps businesses in trouble avoid the prospect of extended litigation and consequent substantial legal expenses.
A Well-Kept Secret To Rescue Struggling Businesses
The secret is not so secret. Our lawyers at Aaronson Schantz Beiley P.A. are well known in the legal community and regularly provide our clients with a complete array of services, including turnarounds and workouts. The legal community is well aware that a reasonable settlement proposal ought to be taken seriously, because otherwise there will be appropriate litigation or proceedings filed to attain a similar result.
A settlement or workout may be the most beneficial result for not only our clients but the clients’ creditors as well. Business bankruptcy can be avoided with careful thought and implementation of turnaround strategies. A prominent firm motto is, “Why do surgery when you can treat the problem with a pill?” The one sure thing about our legal services is that each client’s needs are always paramount.
Business Workout Basics
A business workout involves a company implementing a business plan that incorporates payments to creditors over a period of time and, often, at a discount. The aim is to allow the client to remain in business, settle existing debt and incur new debt in the ordinary course. Often, the company may obtain a new loan or a new investor subject to the compromise and settlement of existing debt.
A creditor will often agree to a business workout if they perceive that it will permit them to receive some payment – albeit, something less than full payment – and will give them the ability to continue to do business with the client going forward. The analysis is often between a small payment in a liquidation scenario versus a greater payment over time and the ability to do business going forward. Frequently, logic prevails.
The Business Workout Process
Often, the process of a business workout involves negotiations between counsel on opposite sides. Our attorneys at Aaronson Schantz Beiley P.A. are generally happy to negotiate with sophisticated counsel because they are more aware of how the situation may evolve in litigation or in a bankruptcy setting.
Parts to the business workout process include the following:
- Analysis of the company’s debt
- Analysis of the company’s financial situation
- The client’s understanding of alternatives
- The client’s determination to proceed
- The client’s full understanding of all costs involved
- The creditors’ understanding of the alternatives
- A meeting of the minds as to the future treatment of the creditor
- Implementation of the workout
Our legal team can assist you in each of these steps as well as with the articulation of a larger business turnaround.
Experience In Negotiating Workouts
Our business lawyers at Aaronson Schantz Beiley P.A. possess a vast amount of experience in working with companies in creating and facilitating successful business workouts. It is essential for a client to understand all their legal alternatives and the costs involved in each. Our attorneys know how to negotiate with creditors, how to recognize and deflect potential problems, and how best to deal with them. We believe that a settlement or workout that is not feasible is not an appropriate resolution. The process needs to result in a new and successful business.
Florida Frequently Asked Questions About Business Workouts
When a business faces financial trouble, it is normal to feel lost about what steps to take next. Our lawyers answer commonly asked questions and address common concerns about business workouts under Florida law to help you make informed decisions.
How can a business workout help my company avoid bankruptcy?
A business workout can help your company avoid bankruptcy by letting you negotiate directly with creditors to restructure debt. This might mean adjusting payment terms, lowering interest rates or sometimes reducing the debt itself, based on what you and your creditors agree to. This approach is often used to tackle financial problems early, keeping your business running and protecting its reputation, which could be harder to do in bankruptcy.
What role do attorneys play in the business workout process?
Attorneys are key in the business workout process. They look at your company’s financial situation, suggest practical steps and talk to creditors so that you can find workable solutions. They also help to make sure any deals follow Florida law, helping you avoid legal trouble down the road. With their help, you are more likely to reach terms that creditors will accept while keeping your business on solid ground.
What are the potential risks or downsides of pursuing a business workout?
A business workout has its benefits, but there are risks to consider. Some creditors might not agree to your proposed terms, making the process tougher. If the workout does not fix the root of your financial issues, your business could still struggle later.
Additionally, creditors might push for stricter terms, or the process could affect your relationships with important partners. Success often hinges on pairing debt changes with real improvements in how your business runs.
How does a business workout compare to bankruptcy?
A business workout and bankruptcy are different paths. In a workout, you deal with creditors directly, outside of court, which can save time and money compared to bankruptcy. Unlike bankruptcy, where a court decides much of the outcome, a business workout gives you room to shape agreements that fit your needs.
It is important to note that workouts do not stop creditors from taking action like lawsuits, which bankruptcy can pause. Bankruptcy might wipe out some debts, while a workout focuses on reworking what you already owe. As such, your situation will determine the best path forward.
Looking Toward The Future
Often, those who own a small or medium-sized business that runs into trouble with debt have difficulty envisioning a future, as each day is spent trying to deal with increasing debt and related issues. Those businesses that utilize the business workout acumen of our legal professionals at Aaronson Schantz Beiley P.A. receive the benefits of experience, knowledge and our track record of success over the years concerning business workouts.
They will gladly take the time to review your present situation. Contact us by calling 786-600-6940 or filling out our short contact form. Do not give up; rather, do what it takes to understand your rights so that you can choose a viable path forward for your business that is struggling with debts or poor performance overall.
Aaronson Schantz Beiley P.A., is a debt relief agency. We help businesses and individuals file for bankruptcy relief under the Bankruptcy Code.