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Selling a Distressed Business? Yes, a Truly Successful Exit is Possible

In an article first published in the Q4 2023 Deals of the Year Issue of the abfjournal, Robert Dinozzi, Chief Growth Officer at parent company, Second Wind Consultants, outlines a transformative approach for owners of overleveraged businesses seeking a viable exit strategy. Dinozzi argues against traditional sale/exit methods, which often fall short of providing successful outcomes for owners. Instead, he champions a sell-side “reorganization exit” as a superior alternative, offering substantial benefits to sellers and opening new avenues for business development opportunities for secured financiers.

The article goes on to explain the intricacies of how businesses bogged down by debt can find little to no equity value left, making conventional sales unfeasible. Dinozzi’s proposed solution, a seller-initiated reorganizational exit, bypasses this deadlock by enabling sellers to lead the reorganization and relaunch of their businesses. This strategy not only ensures the sellers’ meaningful participation in the business post-recovery but also allows them to successfully exit with benefits that a traditional sale would not afford.

Dinozzi further illustrates this concept with a compelling case study of a co-packing business in Southern California. This example demonstrates the practical application of a sell-side reorganization, showing how it can convert a distressed business into a success story, ultimately resulting in a profitable exit for the original owner and opportunities for financiers.

By pivoting to a sell-side reorganizational exit, sellers can transform their overleveraged businesses from distressed sales into thriving enterprises, ensuring a win-win situation for all parties involved. This innovative approach not only rebalances the scales in favor of the seller but also enhances the potential for more successful mergers and acquisitions, preserving more collateral value and introducing secured financiers to new growth opportunities.

Take a deeper dive into Dinozzi’s strategies and to understand the full scope of how a sell-side reorganizational exit can redefine the landscape for distressed businesses and their financial partners. Read the original article in the 2023 Deals of the Year Issue of ABFJournal.

Rise Alliance represents Second Wind Consultants’ debt settlement and personal guarantee resolution arm, creating solutions that benefit you, your business, and even your creditors.

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