A Business Rescue Practitioner prepared a business rescue plan that included the sale of 17% of immovable assets. This plan would not only save the business but also position it for a brighter future for generations to come. All creditors were on board, and the adoption of the plan was imminent.
The directors however refused to accept this reality.
They sought legal intervention to block the sale, believing they could hold on to the assets without dire consequences. After several attorneys and multiple proposals were rejected by creditors, a final plan was adopted. By this time however the plan was no longer one of rehabilitation but rather a wind-down of the business with the loss of all immovable assets.
This is a simplified (and not-too-hypothetical) example of the Streisand Effect, when attempts to suppress or prevent a specific outcome only serve to amplify its impact.
The resistance of the directors in the example backfired catastrophically. The delay in the restructuring process caused uncertainty to grow, financial pressure to worsen, and creditors to lose trust in the business and its leadership, ultimately pushing for a full wind-down instead of a controlled rehabilitation.
To make matters worse, instead of taking responsibility for their own role in the business winding down, the directors shifted the blame to the Business Rescue Practitioners. They claimed the outcome was due to mismanagement by the practitioners rather than their own actions – a classic example of the Self-Serving Bias, where individuals attribute successes to their own decisions but blame failures on external forces. By refusing to acknowledge their mistakes, the directors not only lost the business but also damaged their credibility.
In moments of crisis, delaying or denying reality does not prevent the inevitable – it often makes it worse.