OK, You Attacked the Banker, Threatened Litigation and Had Your Lawyer Write A Threatening Letter. Now What?

I see this more often than I would like. On occasion, small business owners are outraged by what appears to be an unreasonably aggressive, unsympathetic banker refusing to cooperate and making impossible demands. Business owners get aggressive and insulting, they refuse to cooperate and, worse yet, engage their lawyers to “get” the banker. How silly.

Remember one specific point: You have no rights to a workout. The bank has no obligation or commitment to cooperate with your default, make adjustments or work with you. The bank can always simply go right to foreclosure, borrower be damned.

As annoyed, offended, and angry as you may be, you still need the banker on your side for the final offer in compromise discussions. It is here the damage is revealed and it is here that the banker can cause you severe harm in retaliation. It is here that we need his “thumbs up” positive support endorsing our plan and recommending that it be accepted. Ultimately, the banker’s opinion is very important and carries a lot of weight; his support is crucial to your successful workout conclusion.

So, what if you have made the classic mistake of attacking the banker and have clearly jeopardized the relationship putting yourself in serious jeopardy? It’s done, it’s a fact, over and out. Now what?

Hire a workout consultant, as a new party can intervene and save the day. In these situations we acknowledge the bad behavior, accept its existence and work to create a new, mutually beneficial relationship with the bank if we do enter into a workout strategy—together. We accept the banker’s venting about the borrower and even agree with whatever they say about the situation, allowing them to get it off their chest, and then we move into a cooperative workout mode. We kind of throw our borrower “under the bus” so to speak, so we all can drive over him a few times and then get on with business. We are the good guys—we’ve done nothing to anger, annoy, or insult the banker, so we can replace the borrower’s bad behavior with our good behavior and onward we go to a positive conclusion.

This works. We have been in this situation many times and we know how to step in and be the good guy, deflecting the tension previously created by the borrower and replacing it with quality communication, goodwill, full cooperation and a plan that works for everyone. Try it—it is an opportunity for a second chance and it does work very well. Sometimes you do need a little help. Sometimes you do get in so deep that it is very difficult to reverse directions on your own, maybe even impossible.

Call us. Norm will arrange a no-obligation teleconference to discuss your options and our strategies: 413-584-2581.

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