Restructuring zombies

zom·bie /ˈzämbē (noun): the body of a dead person given the semblance of life, but mute and will-less, by a supernatural force; a corpse brought back to life unnaturally by witchcraft or voodoo

Zombies are very popular lately. There are zombie properties, zombie brands, zombie industries, and even zombie leggings.

“Zombification” is a variant of the word zombie, used in the restructuring world to mean headed toward death – as in the case of an industry or a brand.

Zombification can describe an asset with the potential for rebirth – as in the case of properties, as the Wall Street Journal recently reported (“Zombie Properties Come Back to Life”  by Eliot Brown, November 2, 2011):

http://online.wsj.com/article

Restructuring professionals are dealing with all manner of zombies. Each one became a zombie in a different way, and we have different approaches to each one of them.

In the case of zombie properties, the causes are so “macro” they are beyond our comprehension.  But zombie properties, like Kenny in SouthPark, come back to life.  Once a property is in the hands of a new owner, free and clear of old encumbrances, it loses it zombie characteristics, and snaps back to life.

In the case of zombie brands, the causes are usually not as “macro.” It doesn’t take a Wall Street meltdown for a particular brand to fall out of favor.  Brands become zombies because their owners failed to grow, adapt, or compete.  Sometimes a name, unlike the rest of a zombie, can be reincarnated.

Zombie industries are businesses which are approaching obsolescence in the wake of the telecom revolution or other technological advances.  Frequently cited examples are: yellow pages, newspapers, camera film.  In chapter 11,  the remaining vital parts of the zombie are transplanted in a Section 363 process, or the zombie is married off to a young healthy industry that can support it.  This sometimes creates “franken-zombies” which in turn eventually need their own restructuring to shed the remains of the zombie.

As those of us in the restructuring field spend our nights at the zombie museum, something is happening. We don’t realize it until we look in the mirror.

We are becoming zombies.

We are behind in technology – much more so than we realize.

We still think time = money.

We don’t really communicate.

The next two weeks: How to Avoid Zombification in the Restructuring Industry

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One Response to Restructuring zombies

  1. David C. Roseman says:

    Great blogging, Stephanie! Enjoy all your posts, but part 5 of your intro series was sublime.


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