Chapter 11 Bankruptcy: The First 72 Hours

The First 72 Hours – The difference between a company survives or folds during a chapter 11 bankruptcy

The call usually comes late on a Friday afternoon. There’s a tremor in the CEO’s voice as they explain their company’s situation – cash is running low, creditors are calling, and employees are starting to whisper about job security. As a bankruptcy and turnaround consultant, these are the moments that define our profession. We’re not just financial advisors; we’re crisis managers, confidence builders, and sometimes, the last line of defense between survival and dissolution. 

In the complex landscape of modern business, few challenges test a company’s resilience quite like navigating through bankruptcy. The statistics are sobering – only about 10% of companies that file Chapter 11 successfully emerge from bankruptcy. Yet, those that do survive often become compelling examples of corporate resilience and strategic transformation.

The First 72 Hours

Walking into a company facing bankruptcy or emerging from bankruptcy feels like waking up in a dark place, surrounded by strange noises.  All you know is you need a plan and a plan that gets you out quickly and safely. The atmosphere is charged with anxiety, and every decision carries immense weight. Our first task is always the same: assess cash position and immediate obligations. It’s not uncommon to find ourselves huddled in conference rooms, poring over financial statements, conducting operational diagnostics, prioritizing critical customer and supplier relationships and doing so while the weight of thousands of employees’ livelihoods rests on our ability to find viable solutions.

Throughout my career, I’ve had the pleasure of working with multi-million-dollar family-owned businesses to the largest names on Wall Street.  Make no mistake, the pressure is the same to those in leadership roles.  This is a must get right career making moment. The stakes are high on this field and winning is the only option. What often makes the difference between surviving and folding is being able to effectively communicate the plan.

The Three Phases of Successful Turnaround

The most successful bankruptcy transformations often follow a similar pattern.

First comes the stabilization phase – stopping the bleeding through immediate cash management and operational triage.

Then comes the strategic assessment – determining which parts of the business are viable and which need to be restructured or eliminated.

Finally, there’s the rebuilding phase, where we help create a new, sustainable business model. 

The key to all of this is not only having a clearly laid out plan but also being able to effectively communicate that plan to your people. Everyone across your company needs to be onboard, people need clear direction but they need to understand the reasoning behind it. Depending upon the size of the company, the type of bankruptcy support in place and the time frame around financial feasibility, the deployment of resources must be precisely calibrated, with cash management specialists, operational restructuring experts, and stakeholder communication teams working in concert to navigate the challenging waters of reorganization. Getting communication wrong is often the difference between sinking or swimming.

Communication Before Execution

A common problem with any change management event, whether it be bankruptcy, an M&A or even a shift in culture, is a lack of alignment and communication. There’s a tendency to move fast and ask questions later during a restructuring, but in my experience that is absolutely a mistake. If your leaders and your employees are not bought in to every step of the process, your chances of success drop dramatically.

Perhaps the most challenging aspect of bankruptcy consulting is managing multiple stakeholders with competing interests. Picture yourself conducting an orchestra where each section is playing from a different score. You’re simultaneously reassuring employees about their next paycheck, negotiating with suppliers who are demanding payment, calming nervous customers about service continuity, and working with creditors who want immediate answers.  That’s why we must begin with a destination statement for the entire journey and a goal for each relationship for which we are about to embark. You want all stakeholders to be bought in on this plan and have an understanding of the plans impact during the three major phases, stabilization, strategic assessment, and rebuild.

Destination Statement/Reorganization Plan

Successful corporate reorganization typically follows a well-defined yet complex path. The process begins with the formation of a creditors’ committee, a crucial step that brings key stakeholders to the table. This committee works with company leadership to develop a comprehensive reorganization plan – one that must satisfy both the court’s requirements and the practical needs of the business.

The reorganization plan itself becomes a blueprint for transformation and the basis for your communication to your people. It typically involves multiple components: debt restructuring, operational improvements, cost reduction initiatives, and strategic repositioning. Successful plans go beyond mere financial restructuring to address fundamental business issues that led to the bankruptcy.

Working with a recent client on this journey, the first discussion from an operational lens always begins with two questions: 
1. What is the destination you seek and by when?  The second question is,
2. What are the operational processes that are preventing profitability and customer satisfaction or loyalty? 
Then use data and facts to start taking action.

Doing it Alone is a Mistake

Make no mistake, restructuring is hard work. The 90% that fail at this are usually led by people who have never gone through a bankruptcy before. You want to seek guidance from experts who have not only done this before, but were actually successful, and have a process for replicating that success. 

Maximizing Visibility and Tech Returns

Modernization has the potential to revolutionize supply chain management. Manufacturers are using AI to optimize their inventory management, improve delivery route planning, and enhance quality control, to name just a few use cases. But while these companies and many others understand the upsides of AI, few are as familiar with the risk involved. There’s always a learning curve to be navigated, and to add to that, unproven processes, incorrect installation, or little synergy with other systems also pose a challenge.

Without a complete bird’s-eye view of the value chain, even a tiny process error that would otherwise be hard to catch could cause a disruption. It might be a struggle to identify where this interruption is coming from. As a result, operators can’t pivot fast enough, missing those vital holiday season delivery deadlines.

To increase on-time delivery rates, a manufacturer might onboard an AI platform offering predictive routing tools to optimize delivery routes in an increasingly complicated supply chain. The platform may suggest splitting loads or choosing alternative routes during peak congestion. Ideally, everything runs as planned, allowing seamless adjusting on the fly, but we can’t count on this alone.

A strong ERP system can be the first and second line of defense. First, by providing complete visibility into how the platform operates and its outputs. Second, it can maximize the performance of this new system by cross-referencing the AI-suggested routes with additional factors like delivery schedules, cost constraints, or carrier agreements to ensure consistency across all enterprise nodes.

Optimizing ERP Systems

The benefits of a strong ERP system are clear, but getting there is the tricky part. As big-name providers like Oracle, SAP, and now Microsoft are sunsetting their legacy ERP products and support, it’s an especially critical time to reflect on current systems and identify areas for revamping and improving.

There are a few best practices for maintaining a healthy ERP infrastructure that must be top of mind. One must-have is rigorous, comprehensive testing. A proper testing regimen prepares ERP systems for the volatility needed for the demands of an end-of-year holiday season. Things like simulating peak load conditions assist in identifying and addressing potential issues before they impact real operations.

Another best practice is data cleansing. As manufacturers navigate massive loads of new data from their AI adoption efforts, auditing both new and existing data will allow them to prioritize based on relevancy and erase obsolete information to make sure the system is operating as efficiently as possible.

Ultimately, ERP dashboards are indispensable visibility tools, and having a strong one alongside modernization efforts is a great way to make the most of new tech investments. Without an ERP system to manage an abundance of new data across the board, companies cannot respond quickly to disruptions, such as supplier failures or shipping delays.

By leveraging this centralized hub, manufacturers can be confident that their new AI integration—within one process or across the entire enterprise—is fully aligned from department to department. In an era of such rapid change and unpredictability, success lies in adopting new technologies and implementing them with thoughtful, careful intent. Those who have prepared their ERP systems diligently will be best positioned to thrive in the face of unprecedented challenges and opportunities.

Joy Taylor is a Managing Director with alliantConsulting. As a visionary leader and proven change management expert, she isn’t just a consultant; she’s a force of nature in the world of business transformation. With over twenty-five years of cross-functional experience, Joy applied her expertise in program transformations, project leadership, strategy and execution, team facilitation, change management, communication, and Lean Sigma to everything from startups to multibillion-dollar enterprises. Her impressive track record speaks volumes, but her accolades and career milestones set her apart as a critical advisor for CEOs.

Amy Flynn

Managing Director

Amy is the Life Sciences Industry Lead and a Managing Director of alliantConsulting. She has driven global change initiatives for life science companies across Clinical Development, Regulatory Affairs, Quality, Supply Chain, and Medical Affairs and has supported clients with all aspects of Integration and Separation planning and execution.

She is energized by helping companies deliver on their most important strategies and passionate about developing the business acumen and capabilities of her client’s teams. Specializing in large scale transformation, Amy combines a strategic mindset with hands on execution and attention to detail to help clients realize and sustain the intended value of their efforts.

History of Proven Success

Amy has driven transformational change initiatives for life science companies across Clinical Development, Regulatory Affairs, Quality, Supply Chain, and Medical Affairs and has supported clients with all aspects of Integration and Separation planning and execution. She is energized by helping companies deliver on their most important strategies while expanding the experience and capabilities of her client’s teams.

Amy has directed major transformation projects for:

Chris Unruh

Managing Director of ERP and Business Applications

Chris Unruh brings over 25 years of experience in technology transformation and consulting to his role as Managing Director of ERP and Business Applications at alliant. His extensive background in leadership development, talent management, and business strategy enables him to drive results-oriented solutions. Chris’s expertise spans operational transformation, practice development, market-making, and technology program management. With leadership roles at Grant Thornton and MarketSphere Consulting, as well as experience as an independent executive advisor, Chris employs a business-first approach. By leveraging technology as a key enabler, he consistently delivers tangible results for clients across various industries.

History of Proven Success

A serial entrepreneur, Chris founded a successful management consulting practice that was later acquired by Grant Thornton. As the Managing Principal of Product Automation at Grant Thornton, Chris helped develop over 200 internal and client-facing automation products and was recognized for his ability to lead integrations, acquisitions, and technological implementations.

Chris has directed major transformation projects for:

Chris Stephenson

alliantDigital Managing Director: Intelligent Automation and Al

Chris Stephenson is the Managing Director of Intelligent Automation, Al & Digital Services at alliantDigital. Chris has a 25 year history in tech consulting and developing emerging technology solutions for nearly every sector. As a leader in the Al space, Chris has already delivered on multiple internal and client-facing Al products.

History of Proven Success

A serial entrepreneur, Chris founded a successful management consulting practice that was later acquired by Grant Thornton. As the Managing Principal of Product Automation at Grant Thornton, Chris helped develop over 200 internal and client-facing automation products and was recognized for his ability to lead integrations, acquisitions, and technological implementations.

Chris has directed major transformation projects for:

Sondra Leibner

alliantConsulting Managing Director: Transformational Leader and Strategic Visionary

Sondra is an executive level consultant who doesn’t just support leaders but revolutionizes their strategy development, leadership alignment, change management, culture design, and talent development. When you meet Sondra, you will feel the depth of her experience and her understanding that your challenges, culture and circumstances are unique. She will bring flexible, creative and pragmatic approaches to create truly customized and workable solutions. Sondra’s ability to communicate complex messages in simple and memorable ways enhances her ability to achieve unprecedented levels of engagement and adoption. When you begin working together you will be excited about your next meeting.

History of Proven Success

Sondra offers comprehensive services to help business leaders maximize stakeholder value and drive organizational success. She works with teams to craft visions, align leadership, manage changes, and build effective cultures that foster growth and innovation. By focusing on key areas such as communication, collaboration, clarity, and accountability, Sondra helps organizations improve profitability, increase engagement, and realize long-term value.

Leadership Alignment

Leadership teams that are aligned are able to drive business success more effectively. Communication, collaboration, clarity and accountability are the foundations for successful leadership teams. Sondra works to align teams behind your desired destination with the objective of increased engagement, buy in, visible support and clarity of goals to drive success and value realization.

Change Management

It is possible to engage large groups of people and motivate them to do things differently and decrease disruption when thoughtful change management practices are deployed. Change Management requires clarity of purpose, leadership alignment, sponsor leadership, engagement, simple and targeted messaging, crisis and risk management and many others. Sondra will work to develop and execute a scalable approach to manage the people side of change through assessing impacts, readiness and educational needs of stakeholders.

Culture Design

The success or failure of an organization is driven by leadership and culture. Actively taking steps toward building your culture means focusing on the alignment of your leadership, values and behaviors. Sondra will assess current state behaviors, beliefs, norms and structures of your organization to identify similarities and differences inherent in the culture and subcultures and together we will create a roadmap to increase engagement to realize the intended culture.

Talent Development

Customized talent strategies that resonate with your vision, values, and culture are Sondra’s forte, empowering your team to excel and drive the company’s strategic objectives.

Sondra has directed major transformation projects for:

Joy Taylor

alliantConsulting Managing Director:
A Visionary Leader and Proven Change Management Expert

Joy Taylor isn’t just a consultant; she’s a force of nature in the world of business transformation. With over twenty-five years of cross-functional experience, Joy applied her expertise in program transformations, project leadership, strategy and execution, team facilitation, change management, communication, and Lean Sigma to everything from startups to multibillion-dollar enterprises. Her impressive track record speaks volumes, but her accolades and career milestones set her apart as a critical advisor for CEOs.

Award-Winning Leadership and Proven Success

As National Managing Principal at Grant Thornton, Joy demonstrated her unparalleled ability to steer complex, global programs and initiatives. Her tenure as CEO of a $60 million business underscores her credibility and reliability as a peer for other CEOs seeking strategic guidance and impactful change management.

Joy’s career is also studded with achievements including:

Brava! Award,

EY Entrepreneurial Winning Women Class of 2013 member, and a

2022 Life Sciences Voice Top Industry Leader Award.

Award-Winning Leadership and Proven Success

Joy's career is studded with achievements including a Brava! Award, EY Entrepreneurial Winning Women Class of 2013 member, and a 2022 Life Sciences Voice Top Industry Leader Award. As National Managing Principal at Grant Thornton, she demonstrated her unparalleled ability to steer complex, global programs and initiatives. Her tenure as CEO of a $60 million business underscores her credibility and reliability as a peer for other CEOs seeking strategic guidance and impactful change management.

Master of Complex Transformations

Joy's unique talent lies in her ability to manage intricate, large-scale programs that span continents and cultures. She has a proven ability to manage complex, global programs and initiatives, drive process and productivity improvement efforts and lead change in a fast-paced environment.

A Visionary with Tactical Precision

Joy is not just a big thinker; she's a visionary who can translate high-level strategies into actionable goals that people are eager to achieve. Her ability to collaborate with leaders to shape vision and strategy is matched by her meticulous attention to the necessary steps and tactics required to bring those visions to life. She aligns people, process and technology to deliver results that are truly exceptional.

Joy has directed major transformation projects for: