In today’s challenging business environment, adaptability and resilience are essential traits for any organization. While most conversations revolve around growth and expansion, there are instances when a company needs to consider the challenging process of winding down its operations. Whether due to market shifts, strategic decisions, or other circumstances, the wind down phase presents unique obstacles that demand careful navigation. In this post, we explore some of the key steps a business should consider during a corporate wind down.
- Name an interim executive for legal matters, including shareholder considerations, decision making, and managing cash disbursements;
- Form a wind down team to execute the process which typically includes representatives from legal, finance, operations, commercial (if needed), and administrative support;
- Understand dissolution requirements of the state of incorporation;
- Determine key objectives and develop a gameplan, including employee terminations;
- Collect all key information from exiting employees to manage the wind down process (i.e., contracts, contact information);
- Develop a financial model to determine cash runway and funds available for settling debts;
- Understand the regulatory requirements (e.g., for biotech, if commercial products are on the market and/or there are inventory disposal requirements);
- Consider an impartial third party to manage vendors and customer interactions;
- Carefully time operational wind down to match dissolution needs (manufacturing, customer service, information technology support, market surveillance, etc.); and
- Carefully craft and time messages to shareholders, employees, customers and debtors.
In Summary
The wind down process is a challenging and sensitive undertaking. At Monomoy, we pride ourselves on our ability to guide our clients through this journey, providing expert advice and comprehensive solutions. Our commitment to excellence and personalized approach allows us to assist organizations in achieving a smooth transition while maximizing value and protecting their interests. If you are interested in discussing a potential corporate wind down, we would be happy to discuss your situation.
If interested, please contact either Jeff or Stephen to discuss further:
Jeff Goldstein
Partner, Execution Excellence
jgoldstein@monomoyadvisors.com
Stephen Nasiatka
Managing Director
snasiatka@monomoyadvisors.com
