The value of time in a crisis

When a company experiences a financial crisis, time is generally the most scarce resource. Lenders desire a time line for workout or takeout financing, vendors desire a payment date.

All stakeholders desire some kind of antidote to uncertainty.

The primary job of the leader in a crisis situation is to live to fight another day. It is vital to prioritize and be willing to shift focus, if necessary, away from the normal concerns of margins, growth, customer satisfaction etc. towards making the balance sheet related decisions that allow a business to survive. This often means a sale of assets.

Once a decision to sell some or all major assets is reached, then this can be used to satisfy creditor's need for certainty and a schedule. In many cases the creditor may be willing to negotiate a lesser dollar payment in return for certainty regarding the date of payment.

When the asset is real estate, the best current approach to providing certainty is via real estate auction. The auction process allows for a short but intensive marketing effort that ends with a non-contingent sale and a significant deposit with a 30 day close. This approach allows significant bargaining leverage because it provides for far more certainty than a traditional listing.