How can you manage communication during a company bankruptcy?

Filing for bankruptcy is a tough decision that can have serious consequences for your company's reputation, finances, and future. It can also create a lot of uncertainty, confusion, and stress for your employees, customers, creditors, and other stakeholders. How can you manage communication during a company bankruptcy and minimize the negative impact on your relationships and operations? Here are some tips to help you navigate this challenging situation.

1 Be honest and transparent

The worst thing you can do is to hide or deny the reality of your bankruptcy. This will only damage your credibility and trustworthiness, and invite rumors and speculation. Instead, be honest and transparent about your situation, the reasons behind it, the legal process involved, and the implications for your stakeholders. Communicate clearly and consistently through various channels, such as emails, newsletters, webinars, press releases, and social media. Provide factual and relevant information, and avoid making false or unrealistic promises.

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Alastair Monteith-Hodge FRSA FCIM

Global Corporate Communications Strategist
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Your stakeholders all have a vested interest in your business, and for most business owners this means your focus has been on your customers. In reality though, every business has a range of stakeholders, each with their own characteristics and concerns about your situation: Board of Directors Shareholders Investors Debt &/or Equity Financers Customers Employees Landlords Suppliers Partners Government Regulators Industry Bodies Local Communities Employees Unions Media Creditors Understanding their agenda, empathising with what's important to them, managing their expectations, being honest, open, factual and to the point, are all actions geared towards getting stakeholders on board with what's happening.

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2 Be empathetic and respectful

Bankruptcy can affect different stakeholders in different ways. Some may lose their jobs, their money, or their business opportunities. Others may feel betrayed, angry, or disappointed. You need to acknowledge and address their emotions and concerns, and show empathy and respect for their perspectives. Listen to their feedback, answer their questions, apologize for any inconvenience or harm caused, and thank them for their support and cooperation. Try to maintain a positive and professional tone, and avoid blaming or criticizing anyone.

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Diana Petru

Global Community Manager at Wargaming | Ph.D. in Modern History | Women in Games Ambassador
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Own it! Own the content, own the storytelling. Accept your mistakes, acknowledge your current issues and be transparent with all stakeholders. You have nothing to lose now, so you may as well win some sympathy.

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3 Be proactive and strategic

Bankruptcy is not the end of your company, but a new beginning. You need to communicate your vision and strategy for the future, and how you plan to overcome the challenges and leverage the opportunities. You need to demonstrate your commitment and confidence in your company's potential and value, and how you intend to restore your financial health and stability. You need to highlight your strengths and achievements, and how you are adapting and innovating to meet the changing market demands and customer needs. You need to inspire and motivate your stakeholders to stay engaged and loyal, and to support your recovery and growth.

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Michael Good

Managing Principal, South Bay Law Firm
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Most importantly, you need to communicate your action plan - in realistic projections and other quantitative data. This is vital to a successful, court-supervised restructuring. More importantly, it's critical to building credibility with creditors and other stakeholders.

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4 Be collaborative and supportive

Bankruptcy is not something you can handle alone. You need to work with your stakeholders to find solutions and alternatives that benefit everyone. You need to collaborate with your legal advisors, financial experts, and restructuring consultants to ensure compliance and efficiency. You need to negotiate with your creditors, suppliers, and partners to reach favorable agreements and settlements. You need to support your employees, customers, and investors to cope with the changes and transitions. You need to build and maintain a network of allies and advocates who can help you succeed.

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5 Be prepared and flexible

Bankruptcy is a complex and dynamic process that can involve many uncertainties and risks. You need to be prepared for any contingencies and scenarios that may arise, and have contingency plans and backup options ready. You need to monitor and evaluate the progress and outcomes of your bankruptcy, and adjust your communication accordingly. You need to be flexible and responsive to the changing needs and expectations of your stakeholders, and to the feedback and reactions from the media and the public. You need to anticipate and address any issues or problems that may occur, and resolve them quickly and effectively.

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6 Be ethical and responsible

Bankruptcy is not an excuse to abandon your values and principles. You need to be ethical and responsible in your communication, and uphold your integrity and reputation. You need to follow the rules and regulations of the bankruptcy law, and respect the rights and interests of your stakeholders. You need to avoid any conflicts of interest, misconduct, or fraud that may jeopardize your credibility and trustworthiness. You need to honor your obligations and commitments, and deliver on your promises. You need to act in the best interest of your company and your stakeholders, and strive for excellence and improvement.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you manage communication during a company bankruptcy?

1

2

3

4

5

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7

1 Be honest and transparent

2 Be empathetic and respectful

3 Be proactive and strategic

4 Be collaborative and supportive

5 Be prepared and flexible

6 Be ethical and responsible

7 Here’s what else to consider

Corporate Communications

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How can you manage communication during a company bankruptcy?

1

2

3

4

5

6

7

1 Be honest and transparent

2 Be empathetic and respectful

3 Be proactive and strategic

4 Be collaborative and supportive

5 Be prepared and flexible

6 Be ethical and responsible

7 Here’s what else to consider

Corporate Communications

Rate this article

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