Getting the Keys Is Only the Beginning

Getting the Keys Is Only the Beginning

Creating value after taking control of a distressed business.

Written by David Neikrug, Chief Executive Officer, Optimatum Solutions LLC & Enrique Ubarri, Senior Managing Director, GlassRatner

Credit investors lean into pre-negotiated change-of-control tactics

Inflation, high borrowing costs, and a tougher exit environment have pushed a wave of private equity and PE-backed companies into defaults, restructurings, and liability management exercises (“LMEs”).1 The worry is widespread: PwC’s 2026 Private Credit Survey found that half of portfolio managers expect defaults and restructurings to climb over the next one to two years.2

Unfortunately, LMEs rarely fix the underlying problem. They merely buy time, leaving the company overleveraged and likely to fall back into distress. Rather than wait for that to happen, lenders are increasingly writing the endgame into the deal from day one, establishing a transparent roadmap with pre-negotiated takeover mechanics such as “stock-in-the-box” conversion or a hardwired change of control that spell out exactly who takes the wheel if things go sideways.3

Are credit investors ready for the keys?

This more strategic and forward-looking approach still leaves one central question: are private credit firms prepared to deal with everything that comes with owning and operating a business — payroll, vendors, customers, employees, and liquidity decisions they were never structured to run?

It doesn’t have to be done alone

That is where operating partners can play an important role. Their objective is not to push management aside, but to drop in the right people and proven playbooks so the company recovers faster and stands on firmer ground for long-term success. It is the same value creation model private equity sponsors have used for years, adapted for businesses climbing out of distress.

The opportunities for improvement are concrete, not theoretical.

  • Cost and process.  Trimming costs and tightening processes frees up liquidity.
  • Finance transformation.  Gives leaders a clearer view and a sharper decision-making process.
  • Technology.  The right systems eliminate inefficiencies and sharpen reporting.
  • HR transformation.  Systems integration and benefits harmonization reduce complexity and improve the employee experience.
  • Performance and planning.  Performance management disciplines and strategic planning help teams focus on the initiatives that matter most.

Ultimately, taking control of a business should be viewed as the beginning of the value creation process. The first priority is stabilizing the business: addressing operational disruptions, strengthening liquidity, and resolving the issues that led to distress in the first place. Only once the foundation is solid can management and investors align around a broader value creation agenda, identifying strategic priorities and executing initiatives designed to drive sustainable growth and maximize long-term enterprise value.

Three ways credit funds can approach value creation

  • Work with the team in place. Continue with existing management and address issues as they arise.
  • Build an internal bench. Proactively develop operating talent to support portfolio companies.
  • Keep a network on call. Maintain access to an outsourced operating partner network that can move in fast when needed.

Whichever path they choose, the turnaround resources, roadmaps, and playbooks should not be an afterthought. They should be part of the plan from the very beginning.

About the Authors

David Neikrug, Chief Executive Officer, Optimatum Solutions

David is the CEO of Optimatum Solutions LLC, a vendor management firm focused on the HR supply chain, including employer-sponsored healthcare, retirement, and HR systems.

With over 30 years of HR experience, David specializes in benefits optimization, compliance risk mitigation, and leading HR workstreams across M&A transactions, from due diligence through day-one readiness and post-close synergy capture. Optimatum also serves as an Operating Partner for HR Operations®, helping sponsors leverage scale to harmonize HR programs, systems, and vendors.

Enrique R. Ubarri, Senior Managing Director, GlassRatner

Enrique is a Senior Managing Director at GlassRatner, a firm focused on bringing clarity to complex business challenges including restructuring, disputes, valuations, construction, deals & diligence, executive search, and real estate.

With more than 25 years of experience advising companies, investors, and boards on transformation, restructuring, and special situations, Enrique focuses on helping organizations navigate complex, high-stakes environments where performance, capital, and risk must be realigned.

Sources:

  1. Proskauer Rose LLP, “A Test of Endurance: 2025 Private Credit Restructuring Year in Review,” Proskauer Insights. proskauer.com
  2. PwC, “Private Credit Survey,” 2026. pwc.com
  3. Debtwire (ION Analytics), “Gibson Dunn Sees Hardwired Hybrid A&Es Curbing Repeat Restructurings,” July 17, 2026. ionanalytics.com