1. Viable business plan.  Stakeholders will expect radical change and strong leadership.

Have the actions been taken to show that the business has more than a fighting chance to recover from the predicament?  To this end you need to be conservative in your sales, realistic in your cashflow, and have tight control of your costs. 

2. Burden is fairly shared.  Have the owner directors taken a large share of the burden through write down of loans/ share capital?  Are they prepared to put in fresh capital or pledge assets?

3. Fresh capital.  There is no surer sign of faith in a business than investors injecting fresh funds.  Creditors take great comfort from this and can help greatly with bringing momentum and focus to proceedings.

4. Sell off surplus assets.  May not be viable in current market but commitments to do this maybe vital to success.  Maybe opportunity to spin off into separate entity if it improves overall result for stakeholders who are in for the long run.

5. Belief in promoters.  This is the vital ingredient. They say you should make friends on the way up because you may need them on the way down.  Have you treated your suppliers fairly during the past few years?  Delivered on promises? been open and fair?. Do they fully appreciate the reasons for the adverse position? However it is not only about trust; it is also about leadership, vision and commitment.  These will all need to be demonstrated.

 If not then you may not get out of the starting blocks.  If the answer is yes then consider carefully how you approach the issue as it is important to

6. A little upside for the creditor? May not be necessary, but like all deals a sweetener is very valuable!  This may take the form of a deferred dividend or other value.

The best successes are achieved where there is an honest broker/ go between.  This person will examine the business plan, test its viability, and work with the parties to achieve a realistic and equitable solution.  In some cases a steering committee consisting of the business owners, representatives of creditors and others may be appropriate.  

 A 'standstill' agreement and a confidentiality agreement would also be appropriate. Under the standstill agreement banks or other creditors would agree to a moratorium (no demands, acceleration or enforcement) for a period to allow time for the business plan to be drawn up, discussed and tested.