The job takes a great deal of
time for people who had been entertaining plans to kick back a little bit;
each board is likely to demand at least 40 hours a month and attention to issues
ranging from regaining the confidence of customers to delicate negotiations with
regulators and accountants. The directors need to represent—simultaneously—the
interests of creditors-turned-shareholders, whose primary goal may be a quick
and profitable sale of their holdings, and new investors looking for longer-term
rewards as the company reinvests and expands its business. The board must
address the fundamental issues that caused the bankruptcy in the first place,
issues that might be company-specific but could also be symptomatic of the woes
of the industry or the economy. The position presents a challenge that a former
executive with energy to spare might welcome, the way an auto-racing enthusiast
welcomes the challenge of competing in the Paris/Dakar Rally. Still, no one gets
to be director material by driving blindfolded.
Dodging Icebergs
Hirschfield knew what he was up against, having served on
two other post-bankruptcy boards, Carmike Cinemas, a Columbus, Ga., movie
theater chain that had hit financial difficulties in the wake of an overly
ambitious expansion, and WilTel, the successor to Williams Communications, which
had been one of the high-profile telecom bankruptcy cases in the spring of 2002.
“I knew I couldn’t give Rob an immediate answer,” he says. “I didn’t want to
sign on to take a cruise on the Titanic.” At Peregrine, the former creditors,
who were drawing upon their network of contacts to find directors, were asking
Hirschfield to fill a slot on what would prove to be the company’s fourth board
in less than two years. Members of the original board had resigned or been
dismissed by September 2002, when the company filed for Chapter 11 protection
from its creditors. Recruiter Michael Nieset, a partner at Heidrick &
Struggles, handpicked the second board after Peregrine’s then-CEO, Gary
Greenfield, called him on his cell phone while he was racing in transit at
O’Hare airport. “Can you get out here and build a board for me, pronto?”
Greenfield asked. “I need them yesterday.”
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