Discussion with Brenda Adrian, May 2003
Brenda Adrian is a member of the firm, Sitrick and Company, and is head of the East Coast Restructuring Practice. Michael Sitrick, Chairman and CEO, has been a TMA member since 1990 and his firm originally developed the TMA chapter's Public Relations Planner in 1998, which has been revised and put up onthe TMA web site at (under the tab "resources") for chapter use. A shortened version is also in the Chapter Leadership Manual. This is a guide on how to initiate and maintain a chapter PR program, with template news releases, fact sheets and a PR chair job description.
Brenda, now providing communications counsel to companies reorganizing under Chapter 11, had various positions before joining Sitrick and Company in 1994, including the American Heart Association. She described her current focus as “situational PR,” coming in when a company is in crisis and helping it deal with the media.
She gave her work with Service Merchandise in Nashville as an example. Service Merchandise had been through an involuntary Chapter 11 and needed to educate the employees, the city and the news media. Sitrick and Company made friends with a local reporter and she followed every step of the case with Sitrick’s help and it became a big local story. “To this day, whenever this Nashville newspaper has a Chapter 11 story, they call us.”
She also spoke about becoming a local expert. You can build relationships with reporters by letting them know some out-of-ordinary activity or speaker coming up. Invite them to your meetings.
Let them know they can call you if they have any questions in your area of expertise. “You always have some piece of information about the process they can use locally in national cases, making them local.” Although there’s a fine line in commenting on actual cases, you can comment on the Chapter 11 reorganization process in general. In broad terms, you can talk about what it means to employees, what happens to the 401K or pension funds; what are misperceptions about reorganizations and restructurings. Be sure that you let the reporter know that you’re speaking as an individual and not for TMA.
Help the reporter find other sources outside your expertise or if you cannot comment. It gets you points for next time.
You should also seek out other groups, such as the Rotary, Lions, Jaycees, who would be interested in restructuring topics, especially when there’s a high profile cases. You can inform them on the process. You can also go to a local university and talk to a professor about putting together a seminar for students with a mock 1st day of filing, with groups representing the professionals involved: attorneys, financiers, turnaround specialists.
Brenda said the 15th Anniversary Community Commitment Program is a good way to publicize what you’re giving back to the community. Also participate in events that are always in the media spotlight.
Q: How do you avoid getting misquoted?
A: If you have a sense that they only half-way “get it” go back over what you said with them. Just say, “I want to make sure that I’m not misquoted or taken out of context.” Reporters want to do a good job and won’t be offended. If you’re still unsure, follow up with an e-mail: “Just to make sure we’re clear, here’s the main point we talked about.”
Q:How do you build a foundation to become a resource and how to you reinforce it?
A:Invite them to TMA; don’t charge them to come to meetings. Tell them you want to become a Roladex source for them. Tell them you can explain the technical aspects. A lot of reporters don’t want to know you until they need you. It takes awhile for a reporter to realize you can be helpful. Once you’ve done them one favor, they’re like puppies. You may not even be the source but you can be the conduit that helps them get to someone else.
Brenda then gave her 11 rules of crisis communications:
1. Create a crisis team to address communications issues.
At the outset of a crisis, assemble a task force of professionals to identify the concerns and constituents and then prepare the necessary package of materials. Include such things as answers to likely questions (from each of your constituents), draft press releases and letters to employees, customers, bankers, creditors, and vendors as required. Obviously, the preparation and contents of this package must be kept strictly confidential until the exact hour of disclosure.
2.Make the lawyers part of the communications team.
A competent and savvy lawyer is one of the most important members of the communications team. The fact is, your PR and legal objectives should not be mutually exclusive. Quite the contrary, an effective public relations strategy should advance your legal tactics. To that end, the presence of a lawyer on the PR team can help you avoid taking any actions that, however helpful they may be to your public relations campaign, might hurt you in court or undermine the negotiation of your reorganization plan. What’s more, beyond his or her sensitivities to the legal niceties, the attorney’s insights into the politics and strategy of the case can prove invaluable in shaping the design and execution of an effective communications program.
3. Assume that whatever you write is going to end up in the media.
Federal filings today, whether it is a 10Q, 10K or 8K are closely monitored by Dow Jones, Bloomberg and Reuters, as well as such organizations specifically established for that purpose such as Federal Filings. While 10 years ago, you might have been able to “sneak” an item into a “Q” and not have it appear in the media or on the wire services, that is highly unlikely today. In a crisis, this goes for “confidential” letters broadly distributed to bondholders or creditors. If, for example, you have to include in an SEC document that if restructuring negotiations aren’t successful, you will have no choice but to file bankruptcy and file it that way, you may find the headline in the morning paper reading, “Company X says bankruptcy filing likely.” Consider including the fact that there may be other options you will consider a number of other options including the sale of assets, closure of facilities, layoffs, etc. and, as a last resort the option of filing for protection under Chapter 11.
4. Restrict who is allowed to speak to the media.
While the uninformed may regard this as “muzzling,” the last thing a company needs in a troubled situation, where rumors often outnumber products produced per hour, is for someone who is not fully informed on an issue to be quoted in the media on behalf of the company. Facts change rapidly in crisis environments. It is important that only the most informed people speak on the company’s behalf. Limiting the number of people permitted to speak to reporters is the best way to ensure accuracy and consistency in the dissemination of information.
5. Refer all media inquiries to a central point. Make sure that the people handling the calls are well informed about the company, its people, and its products.
This accomplishes several objectives: it ensures that media calls will be answered accurately, promptly and responsibly, it helps to ensure that calls will be referred to the right people within the company, and it prevents inquiries from falling through the cracks.
6. Make sure there are procedures in place specifying precisely how particular shareholder, bondholder, vendor, customer, and other inquiries are to be answered.
In the immediate aftermath of the Wickes’ Chapter 11 filing, the corporate communications department received more than 1,000 calls a week. The same thing happened when National Medical Enterprises was raided by the FBI. In such a frenzied atmosphere, you don’t want your people “winging it.”
7. Decide in advance what you want the story to be.
Never draft a major announcement or press release without first deciding how you want the story to play. What is the message you want to transmit? What is the story you want to tell? These considerations may sound obvious, but you would be surprised how often they are ignored.
8. Prepare for questions.
Don’t get caught unprepared. Before you make any public announcements, consider what sorts of questions your news will likely provoke the media to ask. Write them down, then review possible answers with other members of your management team and your lawyers.
9.Disseminate bad news as well as good news.
In order to provide effective leadership, you must have credibility with your people. They must feel you are leveling with them. Among other things, this means you can’t refuse to acknowledge disappointing developments. Tell your people the bad news as well as the good news, and provide explanations and rationales for both.
10. Control the rumor mill.
In the absence of information, the rumor mill runs rampant. You can minimize destructive speculation by establishing hot lines and feedback programs that help employees separate rumor from truth, and allow management to keep track of what the word is on the grapevine.
11. Maintain your momentum.
Once the immediate crisis has passed and stability returns to day-to-day operations, it is important not to losethe momentum created by the urgency of the filing both to your internal and external audiences. Internally, this can be accomplished by implementing new programs designed to build motivation and productivity. These programs can take many forms, ranging from breakfast meetings with management to sales competitions to feedback and recognition programs. Externally, concentrate on finding ways to interest the media in positive stories on the progress the company has made and is making.
Q:What about chat rooms?
A:You can see what’s going on in them, but lawyers say not to answer back on the chat sites; it’s gossip and a legal question. But you can answer questions on the intranet employee site.
Brenda Adrian can be contacted at (212) 573-6100 or .
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