In a market racked by writedowns, bailouts, layoffs and no shortage of negativity, three top minds in restructuring share their thoughts on how to persevere.

Steve Miller, Executive Chairman of Delphi Corporation

With the full colossus of Corporate America on the brink and the pending uncertainty of a new presidential administration, three top restructuring experts recently discussed the state of things over breakfast with dozens of financial professionals for Doubledown Media's Thought Leadership Forum on October 16th.

Steve Miller, Executive Chairman of Delphi Corporation, Jack Butler, partner and co-practice leader, corporate restructuring, at Skadden Arps, and Randall Eisenberg of the corporate finance practice of FTI Consulting outlined what to look for and how to play this downturn. Held at New York's Harvard Club, the group discussed the financial crisis, pending regulation, and the basics, such as effectively communicating with employees. Now, in the aftermath of that meeting, all three speak to Corporate Leader, expanding on the discussions.

Miller, a veteran turnaround executive whose auto supply company is reorganizing in bankruptcy, emphasized the importance of upfront communication with employees -- even if it is bad news. However, talking with employees during difficult financial times can be tricky.

Jack Butler, partner and co-practice leader, corporate restructuring, at Skadden Arps

"It's always important to have a high degree of transparency, whether in good times or bad. But there is a balancing act you have to play," he says. "If you're too brutally honest, you risk bringing about failure of the enterprise. Too grim a picture can cause a brain drain on your organization or the commercial version of a run on the bank. But you can't sugar-coat your words either and make people believe everything is all right when it's not. You have to recognize the challenges without saying falsehoods."

Regarding the $700 billion TARP passed by Congress, he compared it to the 1979 bailout of Chrysler, in which he was personally involved working alongside then-chairman Lee Iacocca. Chrysler ended up receiving $1 billion in loan guarantees, a seemingly paltry amount compared with the TARP -- plus, the time frame in which the funding process took place was much longer than the recent government intervention. "We had three months worth of Congressional testimony," he recalls. "Like TARP, Chrysler was highly controversial. But our leaders this time around only had a weekend to decide whether or not Bear Stearns and Lehman Brothers should go bankrupt." He adds that while U.S. Treasury Secretary Hank Paulson and Federal Reserve chief Ben Bernanke have done as good a job as can be reasonably expected, the TARP is highly misunderstood and wasn't well-defined in its use.

Speaking on how a company should manage its books in this environment, Butler, the Skadden Arps partner, told Corporate Leader the following: "Many companies are finding themselves in uncharted waters. They must address the prospects of reduced operating cash flow, increasing costs, and limited availability of credit and equity capital for refinancings." He adds that in these circumstances, companies need to assess risks specific to their needs and plan for unexpected disruptions to their businesses. But most importantly, "cash is king," he says. "Senior managements and directors should examine their current business plans with particular focus on liquidity requirements and sources and develop sensitivities and contingency plans."

Randall Eisenberg, Senior Managing Director, FTI Consulting

Adds Eisenberg, "Corporate borrowers cannot count on additional financing from their existing lenders in a way they have in the past. Companies will need to react more quickly so as not to find themselves in a liquidity crunch. Those facing potential covenant violations on existing facilities will find lenders taking more aggressive steps to protect their position while increasing fees charged and interest rates to adjust to current (typically more expensive) market terms."

Speaking of capital markets, today's problems only compound the challenges Miller faces leading Delphi through bankruptcy protection. He calls the job "the most challenging turnaround I've been a part of." Having had experience as a board member of UAL Corp, parent of United Airlines, through four years of that company's bankruptcy, he says the following on the rebuilding of Delphi:

"With a company working its way through bankruptcy, the first thing you have to do is focus on is rebuilding the fundamentals of the business. But it seems as though once we got that organized the capital markets went awry. You have to have both in place. We've also been dealing with higher commodity prices and fixed costs."

But if Miller's track record is any indication, he will not give up. He makes sure to share his enthusiasm in turning around companies with the rank and file, always thinking about how to keep them motivated.

While at Chrysler for example, workers wore pins on their shirts with the slogan "WE CAN DO IT." And while the capital markets must play their role, good old fashioned positive thinking must be also part of the equation, he says.

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