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#Written by David Tam, 1999.           #       
#davidkftam@netscape.net Copyright 1999#  
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From tamda@ecf.toronto.edu Mon Jul 12 18:35:23 1999
Date: Mon, 5 Apr 1999 23:35:38 -0400 (EDT)
From: David Kar Fai Tam <tamda@ecf.toronto.edu>
To: APS 424S <aps424@chem-eng.toronto.edu>
Subject: #26-04/07/99-"Talks may conquer mountains of debt"


The Globe and Mail, Wednesday, March 31, 1999. B16

	This article talks about a book written by Frank Kisluk on
how to negotiate with creditors for the survival of your
business. This article applies the financing aspects of what we
have learned during our business series of courses. The article
asks a number of frequently asked questions and presents simple
explanations and advice. The material from this article is
applicable if your business is ever in a bad financial position
and creditors cannot be paid on time.

	For example, it explains how creditors are interested in
getting all of their payment a bit later as opposed to getting a
few cents on the dollar by forcing you into bankruptcy. Both
private and public deals with creditors are explained along with
appropriate situations in which they apply. It also discusses the
differences between forced bankruptcy, voluntary bankruptcy, and
receivership. Forced bankruptcy occurs when less than 2/3's of
the creditors accept your formal proposal. Voluntary bankruptcy
occurs when you decide that there is no way to pay back all of
your creditors. Receivership occurs when a secured creditor
appoints a receiver to seize control of certain assets but the
business may continue to operate.

	I believe this article presents very valuable advice which
all entrepreneurs should keep on the back of their minds. As we
know, most entrepreneurs achieve ultimate success after a few
failures. When these failures occur, entrepreneurs should be
aware of the options that are available to them.

	I believe that when you are in such dire situations, you
must become aggressive and realize how to take advantage of your
(poor) position. If you feel you can turn the business around and
pay off creditors, strongly emphasis this fact to them. Show them
your plans and convince them that it will work. As well, you must
emphasize that it is in the interest of the creditor to wait just
bit longer to receive full payment and continued business rather
than to receive a few cents on the dollar and lose a customer
permanently.