Most firms fail because they are mismanaged. In a distressed firm, managerial errors are compounded by failing to take corrective actions fast enough. New leadership is usually required, since the managers who dug the hole are rarely suitable for leading the way out. When faced with a distressed company, the turnaround team must decide whether the firm shows enough potential to justify the effort of restructuring. In this case, students learn a framework for undertaking turnarounds, and the three key elements that must be present in order to save a distressed firm: a sufficient customer base, a feasible business plan with the organization to implement it, and the availability of reasonably priced capital to refinance distressed debt.