In this episode, Clark Lonergan – Partner at BDO Canada – unpacks the realities of financial distress, why companies struggle, and what leaders can do to turn things around. He explains why governance, financial leadership, and proactive decision-making are critical to avoiding a crisis and how businesses that ignore early warning signs often run out of options.
Clark highlights the number one ask in financial distress – time and liquidity – and how businesses should control the restructuring process instead of relying on banks or creditors to lead. He breaks down the common reasons companies fail, why management is responsible for 70% of business distress cases, and how the role of finance can make or break a company’s ability to recover.
He also explores key turnaround strategies, the importance of strong financial oversight, and the difference between informal and formal restructuring proceedings.
Listen in to learn more…
Key Moments:
00:00 Welcome and introduction – Clark Lonergan on financial distress and turnarounds
02:19 Why strong governance is essential for business survival
06:45 The role of finance in preventing and managing distress
10:12 The biggest reasons why companies get into financial trouble – Why 70% of distress cases are management-related
15:30 Early warning signs of financial trouble – What CFOs and CEOs need to watch for
18:55 Why businesses must lead the process – not the banks
22:41 Time and liquidity – the two biggest asks in restructuring
27:12 The difference between informal and formal restructuring processes
32:08 Key factors for running a successful business in tough times
38:50 When to seek outside financial expertise – The role of fractional CFOs in crisis situations
42:35 How personal guarantees and collateral impact restructuring decisions
45:22 Lessons from companies that turned their finances around
50:05 The psychology of financial distress – How leadership mindset affects business outcomes
55:18 Final insights – How to be proactive before a crisis hits
