Breaking the cultural barrier Among the impacts of globalization on restructuring, the wide range of national cultures influencing a negotiation is often overlooked. A multinational company, after all, operates in many different countries. Monier is a good example: based in Frankfurt, the company’s management is German, its main shareholder was French private equity fund PAI, and the bulk of the creditors, mainly bondholders, were based in the United Kingdom.
The Monier case, which involved intense discussions on the fate of more than 5,000 employees, received pan-European media coverage from leading print publications in France, Germany and the UK. The challenge for stakeholders was to communicate a story and set of messages that resonated in all three countries, a task that required issuing press releases and internal communications, and conducting interviews and background briefings, in a variety of languages.
Most countries are now establishing distinct legal frameworks to safeguard vulnerable companies. Having grown in different domestic markets and jurisdictions, international companies are sometimes eligible for different forms of legal protection, depending on where the weight of their business is located.
Thanks to this fragmentation of legal jurisdictions – and the way this plays out in restructuring negotiations – language skills offer an increasing edge. Multi-language cross-border commercial court battles, indeed, may become one of the next big communication challenges. French liquor group Belvedere, for example, has been engaged in an intense legal battle with its creditors, most of them distressed debt funds. When the group filed for French “sauvegarde” protection in July 2008, creditors opposed it, on the grounds that the move was illegitimate. Months later, a second assault was launched by the creditors through a legal request filed in Poland. Both camps summoned legal experts to express their opposing views in editorials, highlighting the importance of cultural sensitivity and the ability to understand the subtleties of a differing national perspectives.
It’s all about value The number of complex restructuring transactions, including distressed debt deals, looks set to grow. Media scrutiny will intensify where bigger and more famous fish are involved and where each new skirmish or national ruling appears to favor one camp or the other. As discussed, it will be important to understand the media landscape, the different players and the complex cultural landscape – but communications professionals should not overlook one overriding but easily forgotten issue. Hostile and bloody the battlefield may inevitably become, but the purpose of a restructuring is to rescue a business and to maintain value for all stakeholders in the long run. Anything that undermines this – including over-aggressive communication and needless public posturing – must be avoided.