Honest Anger
Summary: When distressed businesses delay hard conversations with creditors or other key stakeholders, they are almost always hoping for the best. A large customer order that is about to land, or a price increase that is in negotiation. In truth, the instinct to buy time comes at the expense of creditor goodwill and necessary recovery efforts as a result of facing reality. Drawing on firsthand restructuring experience, this piece argues that “Honest Anger,” the productive frustration that surfaces when stakeholders are given a more transparent view of the business, is the foundation on which real recoveries are built. Honest Anger doesn’t last as long as the tension that surfaces when problems are addressed slowly - not because the outcomes improve, but because it moves people into more productive engagement.
When we walk into a distressed business situation, we’re not just walking into a financial crisis. The company’s advisors have been telling creditors that a turnaround is right around the corner. The lender has been assured that cash flow is improving. Vendors are being told checks are in the mail. Everyone is managing relationships and managing expectations, which is a polite way of saying everyone has been managing the truth and hoping for the best.
When we show up and start telling people what’s really going on, they get upset.
I’ve come to think of this as Honest Anger — the frustration that surfaces when creditors and stakeholders finally hear the truth after months, or years, of being managed. It’s a specific kind of anger, and it’s very different from what came before it. Understanding that distinction has become one of the most important aspects of my work.
In truth, the anger is not really about us. By the time we arrive, creditors are already angry. But that anger has been floating without a target, without an outlet. It’s been pointed in the wrong direction, channeled into increasingly futile conversations with people who are either unwilling or unable to give them real information. The anger has been building.
What happens when we come in is give that anger somewhere to land. We tell the truth. And if we don’t know the answers to the questions being asked, we are truthful about that, too. And for many stakeholders, it’s the first honest conversation they’ve had about the business in a long time.
Honest Anger is not a problem to be solved. It’s a signal that the relationship with reality has finally been restored.
Before we get into why Honest Anger is preferable, it helps to understand what it’s replacing.
Dishonest Anger is what builds when creditors are strung along or kept in the dark. It’s the lender who’s been told the receivables are solid. It’s the trade vendor who’s been getting partial payments and promises of being caught up. It’s the minority partner who has been fed projections that bear no relationship to actual performance. Sometimes the narrative is intentional; other times it’s driven by optimism, with hope that the problem can be solved with time.
Regardless of the reason, Dishonest Anger is the result, and it is diffuse and corrosive. It breeds distrust. It poisons negotiations before they start. Creditors in this state aren’t thinking rationally about recovery; they’re focused on feeling wronged, because they have been wronged.
The worst part? It compounds over time. Every week that goes by without honest information is a week that makes the eventual reckoning harder and more expensive. For everyone.
When we walk into a project and lay out the real picture — the actual cash position, the actual collateral coverage, the actual options on the table — the room often gets very quiet. That’s a hard moment.
And yes, some of that anger comes our way. And that’s okay.
Because here’s what Honest Anger gives us that Dishonest Anger never can: a foundation for problem-solving. Once the truth is on the table, we can work with it. We can negotiate a realistic path forward. We can have a genuine conversation about recovery options.
You cannot restructure a business on a foundation of wishful thinking. At some point, the truth has to be in the room. The sooner it gets there, the better for everyone.
It’s not easy to be the person who delivers this information. It’s uncomfortable. No one enjoys telling a vendor they’re going to take a haircut (or not get paid), and no one appreciates being insulted and called names.
But discomfort in service of clarity is part of the job. My responsibility — to creditors, to the business, and frankly to the integrity of this process — is to make sure people have accurate information so they can make rational decisions. That is not possible when the truth is being managed.
The instinct to soften the message, buy a little more time, and avoid the hard conversation is understandable. It’s also how small problems become catastrophic ones. Every month of managed truth is a month of value destruction.
In my experience, Honest Anger has a shorter shelf life than Dishonest Anger. When people are angry because they’ve been lied to, that anger festers. But when people are angry because they’ve just received hard news delivered honestly, something different happens. They process it. They ask questions. They start to engage with the reality in front of them rather than fighting a version of events that was never accurate. In most cases, they begin to trust the process, not because the outcome is good, but because they finally feel like they’re getting a straight story from someone in the room.
That trust, however grudging, is what makes workouts work. It’s what gets creditors to the table and keeps them there. It’s what allows a business to find a viable path through restructuring rather than careening into a messy, expensive, value-destroying litigation. I have sat across from creditors who were genuinely furious with me in the first meeting and productive partners in the third.
A Note to Business Owners
If you are managing a distressed situation and you are managing the truth along with it, I understand the impulse to delay. You’re trying to preserve relationships. You’re trying to buy time. You’re hoping things improve before the difficult conversations have to happen.
My observation is that the cost of that delay, in enterprise value, creditor goodwill, and recoveries, is almost always higher than the cost of the hard conversations.
Creditors can absorb bad news. They cannot absorb being misled. There is a meaningful difference between a creditor who takes a loss and a creditor who takes a loss and feels betrayed. The former moves on. The latter becomes a problem that follows everyone in the room for a very long time.
Get the truth on the table. Let people be angry about it. That’s the beginning of resolution, not an obstacle to it.