Kevin Briggs

When disaster strikes a company, the financial implications can be drastic and speed in acquiring the right resource to steady the ship is vital. In the case of a divestment, the management implications are not the same as with a turnaround, however some of the change management techniques needed for a turnaround are useful in divestments and when a public body is privatised.

Turnarounds identifies the downward spiral that foretells the demise of an organisation in management terms, then how this can be recovered by an interim manager. The article conclues with the financial strategy that supports the overall turnaround strategy.

Examples of my work in distressed organisations include Interconnect, SMF Displays, Torex Retail and Ultralife Batteries.

My assignment with Abbey concerned the liquidation or re-use of a number of subsidiaries owned by the company that arose from the various strategic decisions that were taken during the period following its initial public offering in 1988. Amongst these companies were a Lloyds broker and its management company,a discount house, insurance companies, private banks, assorted property companies (which owned freeholds, shared ownerships and lease residuals), leasing companies, special purpose vehicles and an estate agency. The work was the legal due diligence of these business:

• understanding the nature of the commercial contracts of the businesses and whether there were outstanding assets and liabilities arising from these contracts
• understanding the nature of any real property held by the businesses and whether there were commitments under leases
• where there were employees, the implications of any employment law
• the implications of all taxes for the dissolution of each company

These are very typical questions to ask in the event that a company is to be disposed of by liquidation or whether the objects clause (now removed by the Companies Act 2006) were to be changed.

This is a paper covering the wider subject of divestment strategy.