Four Critical Communications Considerations for Bankruptcy
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By Bob Gold, Principal
Tell a Clear Story That Assuages Fears and Provides Hope
There’s no question that filing for Chapter 11 bankruptcy is a difficult challenge. However, with a sound communications strategy executed by a knowledgeable PR agency or comms professional, you can emerge with your brand intact and strong customer and vendor relations, positioning your company to successfully move forward.
First off, bankruptcy communications are done hand in hand with the legal team. It must start there. It is also not unusual for PR pros to have to serve as expert witnesses in the court. Importantly, the legal team needs to trust the PR team and vice versa, because most lawyers believe all communications should be reserved for the court, and PR pros, on the other hand, believe that transparent and clear information will improve outcomes and set the company up for success. However, these two groups must work together smoothly, or both will be fighting a battle that is unnecessary and fruitless.
Secondly, when planning your bankruptcy communications strategy take a deep dive to completely understand the situation from every perspective. Ask questions of the company leadership and understand what led to the bankruptcy, ask more questions, meet with the attorneys and all leadership who are involved in the saving of the company.
Thirdly, know it is crucial that a set of master documents is prepared, and that everyone from attorneys to key staff are in alignment on the key messaging, communications roadmap, and timeline. This is not a situation to be taken lightly. The company is literally in deep litigation with its debtors. Many times, executives take their eye off the business while trying to save the company in court. This must be avoided at all costs. At the end of the day, the PR team’s role is to be reassuring, calm, and suggest the way forward with a strong commitment to ensuring consistent internal and external communications.
Fourth, know that the same communication is not applicable to everyone affected. There are multiple strands to a good bankruptcy communications strategy that includes external information for shareholders, customers, and vendors; internal messaging for staff at all levels and especially those in sales and customer service and, of course, good outreach to relevant trade and business press.
Each audience should be communicated with in a clear and appropriate manner. For instance, customers and vendors should receive direct letters from the CEO and when appropriate informational decks and e-brochures should be initiated to help tell the story.
For employees, especially public facing staff including sales and customer service, documents including FAQs, escalation protocols, and clear policies around social media and emails are imperative. Importantly you need to keep a steady watch on internal communications, so ALL employees are singing from the same hymnal. It is well worth the extra effort to ensure that they are on board with and understand the key messaging.
For news, industry and business media, you’ll want a rollout plan consisting of news releases to be issued on a wire service, executive bylines and briefings for all relevant reporters, and publications when the time is right.
I believe that ALL business is the business of relationships. Rebuilding trust requires having the same resonating message come from at least three separate sources/channels in close timing so that the message “sticks” with intended audiences. One-off messaging is simply and easily forgotten.
Bankruptcy is a process. Because there are many kinds of bankruptcies that all fall under similar codes – most consumers are confused by the term. And while it can be liquidation, in most instances it is the company and organization saying, “we will make new financial decisions and begin a new model to maintain the business.”
Because of COVID-19, we are expecting the largest number of bankruptcies in history, even surpassing the Great Depression. It is also anticipated that numerous municipalities, county, and state governments will face bankruptcy, in addition to non-profits, cultural institutions, and of course for-profit businesses of all sizes. Courts will be overloaded, media will become overwhelmed with news announcements unable to report on any claims under a certain size, and many, many folks will be let down, frustrated and depressed.
The only way forward is for public relations professional to provide important services that allow the company to tell a clear story, assuage fears, and help provide hope in the form of reasonable exit strategies that are easy to understand.