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Provide Your Comments on the New Proposed Fee Guidelines

2011-11-21T12:01:00.000-08:00

The United States Trustee Program (USTP) has drafted new proposed guidelines for reviewing applications for professional fee compensation in larger chapter 11 cases (more than $50 million in combined assets and liabilities, aggregated for jointly administered cases).

According to the proposal, among the goals of the guidelines are to ensure bankruptcy professional fees are subject to the same scrutiny and accountability that apply in non-bankruptcy engagements, and to increase disclosure and transparency in billing practices.

The proposed new guidelines feature six key changes:

Electronic Data: Fee applications should be submitted in an open electronic data format

Categories and Tasks: New project categories, as well as activity-based sub-categories, have been added

Verified and Other Statements: Clients should provide verified statements in connection with a fee application to disclose, among other matters, whether the client reviewed fees and compared them to its approved budget

Budgets and Staffing Plans: Budgets and staffing plans will be encouraged

Additional Disclosures: The United States Trustee will seek disclosure of the lowest, highest, and average rates billed for the preceding year for estate-paid bankruptcy work and for all other work combined

Special Fee Review Procedures: The proposed guidelines set forth models and principles for the use of independent fee examiners, fee committees, and fee committees with independent chairs

Read more about all of the objectives as well as additional details about the six key changes. You also can read the entire draft of the proposed guidelines or view the current guidelines that were established in 1996.

The USTP invites public review of and comment on these proposed guidelines by January 31, 2012. I encourage you to submit your comments by e-mail to USTP.Fee.Guidelines@usdoj.gov. All comments received will be made available for public inspection at www.justice.gov/ust.

Biz Stone Shares Insight and Lessons Learned from Co-founding Twitter

2011-10-26T18:26:00.000-07:00

Biz Stone shared colorful insight and lessons learned from the creation of the $7 billion social networking site during an interesting keynote presentation at the 2011 TMA Annual Convention this morning.

Stone, who prior to co-founding Twitter worked on the very platform that this blog is hosted on (Blogger) at Google, provided an interesting glimpse into how Twitter went from being a means for sharing text messages to playing a central role in organizing political uprisings.

He also shared several stories and lessons learned that inspired and motivated him to co-founding Twitter. For instance, looking for an opportunity to meet new friends and fit in during high school, Biz started a lacrosse team and not only did he enhance his social standing, he went on to excel in the sport. The lesson learned – you can manufacture your own opportunities.

He went on to share additional personal stories and encouraged the turnaround and corporate restructuring professionals in the packed audience to use creativity in their work and to have the willingness to fail spectacularly in order to succeed spectacularly.

Stone ended his presentation by sharing his seven assumptions for business:

We can change the world, build a business and have fun.
We don’t always know what’s going to happen.
There is a creative answer to every problem.
There are more smart people outside our company.
We will win if we always do the right thing for our users/customers.
The only deal worth doing is a win-win deal.
Your co-workers are smart and have good intentions.

Following his presentation, Biz participated in a question and answer session and discussed Twitter’s business model and ways attendees can use the social networking site to enhance the marketing of their firms or clients.

Follow TMA on Twitter to learn about the latest TMA and industry news.

TMA Sets Sail for San Diego

2011-10-24T18:45:00.000-07:00

I have arrived in beautiful San Diego to join more than 600 turnaround management, corporate restructuring and distressed investing professionals for this week's 2011 TMA Annual Convention.

I look forward to TMA’s annual event every year, but this year I am particularly excited. Not only because of the great Southern California destination, but because this year’s event promises to be a memorable one due to a number of unique events and new features – including a TMA smartphone app – that have been added to enhance the education and networking offered at the meeting.

Led by co-chairs David McReynolds and Omar Mirza, the 2011 TMA Annual Convention Planning Committee has put together an excellent program.

It all starts on Tuesday afternoon, with a special advanced education session panel on ethics, led by moderator Jack Butler. That evening, the networking gets underway with several receptions leading up to the California Wine Walk in the Exhibit Hall – a unique take on the traditional exhibitor reception.

The Tuesday night receptions conclude with an event I think everyone is eagerly anticipating – the Opening Reception Aboard the USS Midway. A truly unique venue, attendees will not only be able to enjoy a great evening of networking and developing business relationships, they will also have the opportunity to check out an aircraft carrier that was once the largest ship in the world.

Twitter co-founder Biz Stone gets the educational component of the Annual Convention underway with the keynote presentation on Wednesday morning. Biz will share business insight developed through his experience with the $7 billion social networking site and while he was working at Google and as a strategic advisor for several companies and organizations.

Wednesday morning also is the debut of a new education session format. Designed to provide more interaction and idea sharing, five workshops have been added to the schedule and will cover technology turnarounds, forensic accounting and more.

Also included in the agenda for the first time is a session created specifically for young professionals – Rainmaking: Business Development for the Next Generation. An experienced panel will share their knowledge on what it takes to excel in the turnaround management and corporate restructuring profession.

On Wednesday afternoon, Lynn M. LoPucki will instruct attendees on how to use the UCLA-LoPucki Bankruptcy Research Database (BRD) during the Keynote Luncheon. (Thanks to the support of the TMA Cornerstone Board-designated Endowment, TMA members now have access to the BRD free of charge).

These are just some of the many highlights. The convention also features an exhibit hall, a full education schedule and numerous networking opportunities during the meeting and in the evening.

There’s a lot to look forward to this week. I hope to see you in San Diego and if you haven’t registered already, you can still register onsite or online. And if you can’t make it to this year’s TMA Annual Convention, I encourage you to mark your calendars and plan to attend the 2012 convention in Boston, November 1-3.

TMA Adds Interactive Workshops to the Annual Convention

2011-08-29T11:36:00.000-07:00

As a way to improve networking and promote interaction among conference attendees, TMA is introducing the workshop concept to the 2011 TMA Annual Convention in San Diego, October 25-27.

While the larger general and concurrent sessions focus on broad topics and consist of presentations by a panel or speaker, the workshop concept was conceived to involve smaller audiences and cover more niche topics. With a goal of 10-25 participants per workshop, the format is designed to promote interaction among the attendees and provide for more give and take than is possible in the larger sessions.

Three workshop topics are being presented at this conference:

Social Media – Educates professionals on the use of social media including LinkedIn, Facebook, Twitter and other networking tools. Speakers consist of both a social media and communications consultant.
Technology Company Workouts – Focuses on the unique aspects of technology companies and the complexities of workouts where intellectual property rather than hard assets provide the collateral. Speakers have backgrounds in founding, lending and consulting to technology oriented companies.
Starting Your Own Practice – Whether due to a desire to break away from the large corporate structure, or forced to because of a layoff, many TMA members have successfully formed their own firms. Speakers will focus on the aspects and realities of starting your own firm and all have first hand experience in doing just that.

The workshops are geared toward a smaller audience in order to promote discussion among the group. The speakers will not be “presenting” to the group, but will instead lead a discussion on the topics where members of the audience will be expected to ask questions and contribute. The goal is to promote interaction among the group and give conference attendees another avenue to meet and network.

Survey feedback for the TMA conferences indicate that many would like more networking options for meeting other attendees. The workshop idea is one of the initial steps toward providing additional networking options when attending a conference. Any other ideas are always welcome and please feel free to contact either myself or Jennifer Bethke at TMA Headquarters with your thoughts.

Register and reserve your hotel room at turnaround.org.

Lenders Panel Shares Insight at the TMA Southeast Regional Conference

2011-06-24T08:35:00.000-07:00

Turnaround industry professionals from across the southeast assembled in Palm Coast, Florida, June 2-3, for the TMA Southeast Regional Conference, where they heard an eye-opening report on the asset-based lending market from a panel comprised of senior lenders and credit professionals from across the industry.

The conference is one of nine regional conferences held by TMA and its chapters this year, including seven in North American and two overseas, the TMA Europe Conference (Helsinki, Finland) and the TMA Asia-Pacific Conference (Taipei, Taiwan).

My colleague Kristina L. Anderson, managing director, Carl Marks Advisory Group LLC, attended the TMA Southeast Regional Conference. She has passed on some great insight from the session “Lenders Outlook: It Only Hurts When I Laugh.” The distinguished panelists offered the following observations on today’s asset based lending market:

Less underwriting and more arrangements - lender groups are more frequently pre-arranged by sponsors as opposed to one lead lender underwriting the deal and selling it down
Lead arranger hold levels are rising
Springing covenants tied to availability are more prevalent than traditional covenant structures
Pricing has reportedly fallen to the L+200-275 range
Total senior debt has routinely exceeded 5x EBTIDA, with revolvers in the 2-2.5x EBITDA range
Initial equity contribution are falling, in some cases down to 25-30 percent
Loan balances - usage under revolvers - have been rising this year
Increasing prevalence of FILO (first in last out) tranches, which have a higher advance rate and extra pricing, and are in some cases being used to negate the potential impact of springing covenant thresholds
Voting rights continue to be under pressure; traditional-100 percent issues are moving to a supermajority vote
Reporting frequency is loosening, and triggers must be tripped to get a BBC more frequently
There is a hangover of bifurcated loan structures from the last restructuring cycle (where part of the lender group extended and part retained their earlier maturities)
Equity cures are being built in at close and in some cases can be used to satisfy EBITDA tests
EBITDA definitions are loosening and inconsistent across the marketplace, raising questions as to whether, because the EBITDA definitions are becoming vague and inconsistent, the covenants that remain in today’s new deals will never actually trip

Municipal Messes Keep TMA in the News

2011-05-30T17:54:00.000-07:00

TMA’s involvement with cash-strapped municipalities continues to spur interest from news reporters. Recently, a Dow Jones reporter interviewed Scott Eisenberg, a managing partner at Amherst Partners from our Michigan Chapter, and Michael Imber, principal at Grant Thornton, from our New York City Chapter.

Eisenberg was among corporate turnaround professionals summoned by the state of Michigan’s incoming treasurer in December to discuss ways to train emergency financial managers. The program launched in February and Eisenberg and Imber were among the first 60 turnaround professionals certified as emergency financial managers.

In March, Michigan Governor Rick Snyder signed a law giving state-appointed financial managers the power to end employee contracts and suspend collective bargaining. Much hue and cry ensued. Still nearly 400 government and private sector workers took the second emergency manager training course in April. Bloomberg and Bloomberg Businessweek and Crain’s covered developments; less salutary were remarks on the Teamster Nation blog.

The Dow Jones reporter wanted to know what other states may follow suit, as well as how restructuring techniques in the private sector can be transferred to the public sector. Both Imber and Eisenberg discussed how turnaround professionals, in the role of chief restructuring officers, are empowered to make and implement tough decisions to achieve the maximum economic outcome. Not so in the public sector, where the maximum economic outcome may not always be the most politically expedient.

That’s fine, if a municipal, regional or state body can foot the bill for that choice, Imber said. In these times, that choice is less affordable. Eisenberg gave the example of two school districts that previously served 20,000 students, but now each serve only 8,000. It should be one district, but school officials are reluctant to make a decision that spells the end of their own jobs.

Imber says his firm has responded to about a half dozen requests for proposals (RFPs) issued by municipal agencies, illustrating another difference from how public sector agency engagements differ from those in the private sector. Imber foresees a bifurcated municipal distressed market: towns with budgets less than $100 million in revenues that could be served by small firms and large municipalities, counties and states that need broader expert services addressing tax policy, pensions, valuation, accounting and other areas, which large, full-service firms provide.

Eisenberg noted that cash-strapped states don’t face one-size-fits-all problems. Michigan’s structural problems include high unemployment, severe property tax declines, and a large elderly population. Illinois, on the other hand, is hobbled principally by underfunded pensions. He regards the Delphi bankruptcy as a loud wake-up call marking the end of an era of $70,000-$80,000 union jobs in which workers put in a day’s work and received pay for two, considering pension and benefits.

The public sector will have to endure the “gut-wrenching” change experienced in the private sector, he said, and learn to do more with less.

Read the article.

Retiring Bankruptcy Judge Seeks Adequate Compensation

2011-05-10T15:44:00.000-07:00

At the TMA Board of Trustees meeting held during the recent 2011 TMA Spring Conference in Chicago, Jack Butler presented a letter he recently received from the Hon. George C. Paine, II, Chief Judge of the U.S. Bankruptcy Court for the Middle District of Tennessee.

In his letter, Judge Paine, who will be retiring at the end of 2011, explains that compensation for bankruptcy judges has remained the same (about $160,000) for over 20 years because of linkage to Congressional salaries. The Judge then notes that, as a result, bankruptcy judges are paid less than other court and government employees who have substantially less responsibility. He also points out the disparity between judicial salaries and the compensation of attorneys in private practice.

Judge Paine warns of the potential consequences to corporate restructuring resulting from the disincentive that inadequate pay creates for capable and experienced bankruptcy attorneys to choose to serve in judicial capacities. He says, “this inequity can only lead to less qualified candidates applying for judgeships rather than highly qualified individuals seeking the position as the capstone to a successful commercial legal career.”

Judge Paine has raised serious concerns regarding the long-term impact of inadequate compensation upon the willingness of highly qualified candidates to serve on the bankruptcy bench. His letter contains a number of examples where federal employees with specialized skills are paid at levels intended to attract strong talent.

We who work in the restructuring industry are challenged by the Judge’s letter to act together “to push for increased judicial salaries so that judgeships become the capstone of successful careers, not stepping stones or gravestones.” It is important that we speak up to educate Congress on the importance of adequate compensation for bankruptcy judges.

Auto Overhaul Czar Drives Home Results

2011-04-28T15:08:00.000-07:00

Steven Rattner, who shepherded the Obama Administration’s overhaul of the automotive industry, explained the rationale behind the “controlled bankruptcy” of General Motors and Chrysler and the economic benefits it produced during his keynote speech at the opening of the 2011 TMA Spring Conference on Thursday.

The situation was dire on Columbus Day 2008, when General Motors’ Rick Waggoner revealed the bleeding company faced a potential shutdown. Rattner, tapped for his experience on Wall Street and within a political context, said he approached the situation as a private-equity exercise and saw his team as the custodian of government money.

Referring repeatedly to his new book, Overhaul, he said the team had to determine whether the companies were viable and had “backable” management, and faced a race against time to get both companies through a Section 363 sale. While the results were controversial to many in our industry, he emphasized that the plan withstood judicial scrutiny all the way to the U.S. Supreme Court,

Moreover, the U.S. government stands to receive $72 billion of its $82 billion investment in GM and Chrysler. The alternative would have been far worse than a $10 billion loss; if the companies collapsed, millions would become unemployed — in an instant.

Though the economy remains sluggish, the companies are on the road to health. GM’s structural costs are $23 billion, compared to $33 billion two years ago, and the company earned a $4.7 billion profit in 2010, compared to a $31 billion loss in 2008, he said.

Rattner said the experience drove home the role of “shared sacrifice’’ in a crisis, the importance of TARP funds — a mechanism that allowed government funds to be deployed without the blessing of Congress — and a good management team. He referred to Ford’s decision to install a new CEO, Alan Mulally, and “hock everything” to raise funds to ride through the recession without government help. Rattner’s takeaway?

“The jockey is as important as the horse.”

Headed to ABI

2011-03-31T12:05:00.000-07:00

This week I, along with many other of fellow TMA members, are headed to the American Bankruptcy Institute's (ABI) 29th Annual Spring Meeting at the Gaylord National Hotel and Convention Center in National Harbor, Md. A number of our members also will be speaking at the conference.

On Saturday morning (April 2), 8:00 a.m. - 9:30 a.m., TMA President Mark Indelicato, will participate in a panel entitled "Business Reorganization, Court Administration and Alternative Dispute Resolution." Mark will provide his insights into business reorganization and the use of alternative dispute resolution in connection with bankruptcy reorganization plans.

Also on Saturday, 9:30 a.m. - 11:00 a.m., Bill Lenhart, 2010 TMA Audit Committee chair and long time director, will participate in a panel entitled "Chapter 11 Creditors’ Committees and Examiners: Are They Effective?" Bill will join three other panelists providing their insight into the role of Chapter 11 committees and examiners and the role they play in aiding the reorganization process.

These panels are part of a number of joint efforts between TMA and ABI to improve our program offerings to members during these challenging times. We very much appreciated ABI hosting us and we look forward to reciprocating by hosting an ABI-sponsored panel at the 2011 TMA Annual Convention this October in San Diego.

We hope you are able to join us!

Top 10 Conference Networking Tips

2011-03-16T14:20:00.000-07:00

TMA’s upcoming Spring Conference in Chicago (April 27-29 at the JW Marriott Chicago) is one of our association’s largest national events and will include many networking receptions and countless other opportunities to develop or enhance business relationships (visit turnaround.org to register or to download the conference brochure).

TMA Arizona Chapter Public Relations committee members Kathleen Taddie and Jeremy Goodman have put together the following helpful article on making the most out of your conference experience.

A primary reason to attend conferences is to network. Yet, many attendees leave conferences with a binder and CD—but no meaningful contacts. Even if you don't enjoy socializing, the benefits of networking at conferences are immense. Conferences are an opportunity to meet people who can give you new ideas, make introductions for you, send you referrals and even become clients.

Below are some tips to help you get the most out of your next conference experience.

Strategize. Before you step foot into a conference, you should have already thought about the individuals that you want to meet, the speakers you want to hear, and the information you are hoping to learn. By planning ahead, you will take away from a conference precisely what you were seeking rather than whatever you happen to stumble upon.
Socialize. Do not be afraid to talk to the people in close proximity to you as you walk into a seminar. Even a simple “hello” has the potential to turn into windows of opportunity later during the week of the conference or even months down the road.
Listen. Many people are far more interested in talking about themselves than they are in having a truly informative conversation. So, listen, and then ask critical questions to help them to migrate from small talk into more effective and mutually beneficial conversation.
Power Down. As heartbreaking as turning off your BlackBerry may be, it is crucial to give it a break while you are on breaks at the conference. When your face is buried in your Smartphone it sends a message to the people around you that you are unapproachable. While on breaks, speak with others; there is plenty of time to check your emails back in your room.
Follow Up. Every once in a while you will meet some very interesting people at a conference. The chances that you are going to run into them at the coffee shop after the conference are slim to none. So make sure to follow up when you meet someone who genuinely sparks your interest. If you do not make the effort to follow up with them, chances are they are not going to make the effort to follow up with you either. It can be as simple as sending them an email. If you do not follow up with someone then it may have been pointless getting to know them in the first place.
Don’t Get Star Struck. Everyone enjoys meeting famous speakers and important people. Do not spend all of your time trying to get close to the speakers. Chances are that the people with whom you are going to create the most mutually beneficial relationships are other conference attendees. Make sure that your business card ends up in the hands of the other attendees, and not stacked among the hundreds of other business cards that the celebrity speakers will receive during the conference.
Get To The Point. Conferences move quickly, and so do the attendees. Make sure to skip some of the small talk and get to your point quickly. If you are new to the game and feel intimidated or worried, practice in the mirror. This, along with prior research into a particular person’s business, will lead to far more valuable conversations.
Take Notes. It may sound like an overplayed study tip from school, but the reality is that we simply cannot remember everything that we hear during a conference. So pick up a pen or your iPad and jot down the things that seem important.
The Early Bird Gets The Worm. Get to events early. Not only does this show that you are punctual, but it shows you are truly interested, and you can meet people as they arrive—which is considerably more fun that working your way into a crowded room. If you arrive later you will have to overcome the obstacle of inviting yourself into conversations, instead of being involved in them from the beginning.
No, really, STRATEGIZE! A great networking conference starts with planning ahead. If you know people who are attending the event, contact them, make an introduction by phone or email, and make plans in advance to meet with them at a set place and time at the conference. If you do not know who is attending, contact the sponsors for an attendee list.

Conferences can be wonderful learning and networking opportunities if you are able to make the most of them.

Kathleen Taddie is president of Kathleen A. Taddie Consulting LLC, and Chair of the TMA Arizona Chapter Public Relations Committee. She can be reached at 602-920-4573 or ktaddie@cox.net. Jeremy Goodman is a banking and bankruptcy attorney at Gust Rosenfeld P.L.C., and a member of the TMA Arizona Chapter Public Relations Committee. He can be reached at 602-257-7954 or jgoodman@gustlaw.com.

Should States be Allowed to File for Bankruptcy?

2011-02-17T14:18:00.000-08:00

Nearly 70 percent of respondents to a recent TMA poll think struggling states should not have the ability to solve fiscal problems aggravated by the recent recession through bankruptcy. But 32 percent are in favor, arguing that it would address troublesome union contracts and debt levels. Where do you stand on the issue?

View the full story covering the TMA poll in The Wall Street Journal's Bankruptcy Beat blog.

Deal Flow Continues at Turnaround Capital Forum and Cocktail Reception

2011-01-28T11:31:00.000-08:00

The second night of the TMA Distressed Investing Conference featured another highly successful networking event, allowing attendees to continue building upon existing business partnerships and create new ones. The Turnaround Capital Forum and Cocktail Reception featured more than 30 investors and other distressed capital providers available to meet with attendess to discuss investments, areas of focus, challenges they are facing and other topics that are critical to their clients.

This unique networking event, along with the opening night joint reception with the CFA and countless other business opportunities, both during the conference and while enjoying all that Vegas has to offer, have helped make this year's conference yet another successful event in its five-year history. Further enhancing the value of the conference was the outstanding distressed investing education program, which featured a very insightful and informative keynote presentation by James Grant yesterday.

We can't wait to return to Vegas for next year's conference. Look for more information regarding dates and location in the near future. In the meantime, start making plans to attend the 2011 TMA Spring Conference, April 27-29 at the JW Marriott Chicago.

Opening Reception Brings Together TMA and CFA Members

2011-01-27T09:21:00.000-08:00

The 2011 TMA Distressed Investing Conference kicked off last night with a very successful joint reception with the Commercial Finance Association. 130 CFA members from thier just concluded Asset-Based Capital Conference joined many of our 450 conference attendess for a lively networking event.

Today the high quality education program kicks off featuring keynote speaker James Grant. We'll also have an advanced case study of the General Growth restructing and panel sessions covering the Dodd-Frank Act and CMBS/REMIC. Ending the day's schedule is the much anticipated Turnaround Capital Forum and Cocktail Reception, which gives attendees access to network with more than 30 capital provider firms.

More to come as the conference continues here in Las Vegas...

Las Vegas, Distressed Investing Conference Deliver Optimism

2011-01-25T15:34:00.000-08:00

No city symbolizes optimism quite like Las Vegas. The mere sight of the famed strip inspires thoughts of riches and fortune. So, it’s only fitting that the 2011 TMA Distressed Investing Conference descends on the Nevada desert this week in our own search for opportunity in the face of uncertain times in our industry.

TMA’s fifth annual Distressed Investing Conference has quickly become one of the “must attend” events in our industry’s calendar. The conference kicks off with a new networking feature on Wednesday night, a joint cocktail reception co-hosted by TMA and CFA that leverages the back-to-back presence of both organizations in Vegas to create a special opportunity to build the relationships that will lead to new business.

On Thursday, TMA has brought back for a second year, the highly successful Turnaround Capital Forum. This event will provide a focused session where over 30 investors and other distressed capital providers will be available to exchange thoughts with attendees about their investments, areas of focus, challenges they are facing and other topics that are critical to a successful deal-oriented event.

While the conference will facilitate networking at every turn, TMA’s education program also delivers an impressive slate of expert panelists and speakers, including keynote presenter James Grant. Panel and workshop topics cover everything from the Dodd-Frank Act to the General Growth Properties restructuring to the auto industry.

So, as I head west from New York today, I can’t help but be optimistic. I know that I’m increasing my odds of success – and that’s all you can ask for in Vegas. I look forward to seeing those of you attending later this week.

If you haven’t registered but are still interesting in joining more than 400 of your colleagues at this great event, hop on a flight and join us. You can register onsite at the Aria Resort. TMA’s onsite staff will be glad to help you. Visit turnaround.org for more information.

Reinventing Ourselves and Our Profession in 2011

2011-01-13T09:57:00.000-08:00

If you are a turnaround practitioner, it is easy to be anxious these days. We hear that the economy is steadily picking up steam despite the continuing challenges of persistent high unemployment, political infighting that leads to regulatory uncertainty for many industries and the black hole of risk that remains in real estate.

Everyday we see new financing deals that serve as more evidence that the “Great Wall of Maturity” is being pushed out further into 2013, 2014 and beyond. Default rates are expected to remain below historical averages at least until 2012.

The number of bankruptcy filings and the duration of cases filed have both steadily declined. In fact, the Chapter 11 process itself seemingly has been converted from a judicially monitored means of effecting a business reorganization to an administrative procedure for courts to bless or enforce a pre-negotiated balance sheet restructuring deal.

As a result, turnaround professionals, like those in so many other industries significantly affected by the economic crisis, have had to adjust.

Practitioners and their firms have responded by adopting the mantle of “financial advisor” traditionally favored by investment banks and accounting firms. In this capacity turnaround practitioners perform assessments, review business plans, or provide expert testimony. However, this type of work tends to be shorter duration, less-fee intensive work particularly when compared to the success fees garnered by investment banks involved.

Those of us who have been in the business for a while have been through these cycles before. Using transactions to extend maturities or restructure debt does not fix poor management or other underlying problems faced by troubled companies. Eventually, the issues will have to be addressed, now or perhaps in 2014 when a number of companies will be standing in front of the Great Wall.

In the meantime, turnaround practitioners will do as they have done in past cycles…reinvent themselves.

They will add capabilities or specialties. They will, accurately, point out that the tools of “corporate renewal” are important for companies regardless of where they stand in the company lifecycle. They will continue to grow their businesses outside of North America as evidenced by the rapid growth TMA has seen in its international membership.

There is hope and there are opportunities out there for turnaround professionals. But we can’t keep waiting for the economy to improve and pick up the pace. All signs indicate our path to recovery will continue to be slow and arduous. We need to take matters into our own hands in 2011 and adjust our practices to face today’s realities.

Industry and Economic Forecast Webinar - January 18

2011-01-13T09:50:00.000-08:00

Next Tuesday I am participating on a panel for the TMA Webinar Industry and Economic Forecast – We are not out of this yet…

We will review the 2010 economic scene, interpret results from TMA’s latest survey on industries most likely to face trouble and those most likely to improve, and draw from our experience working with businesses mired in operational and financial problems.

The Webinar takes place next Tuesday, January 18, Noon – 1:00 p.m. EST. Click here to register.

More about the Webinar

We will review the 2010 economic scene, interpret results from TMA’s latest survey on industries most likely to face trouble and those most likely to improve, and draw from their professional experience working with businesses mired in operational and financial problems.
Prepare yourself for the coming year with an inside look at the continuing and new challenges facing the commercial and residential real estate and banking industries, state and local municipalities and other sectors in 2011.
Learn how the turnaround and corporate restructuring world will be affected and how you can better prepare your firm to handle the challenges that lie ahead.

Additional Details

Moderator: Kenneth R. Yager II, MorrisAnderson

Panel: Matthew S. Darin, Frontline Real Estate Partners; William J. Hass, CTP, TeamWork Technologies Inc.; Patrick C. Lagrange, Carl Marks Advisory Group LLC.

CPE Credit Offered: 1 credit

Loan to Own – Is Maximizing the Value of the Estate Enough?

2010-12-22T07:56:00.000-08:00

Guest author Rachel C. Strickland is the moderator for "Loan to Own Plays - The Good, the Bad and the Ugly," an educational session that takes place Friday, January 28, 9:45 -10:45 a.m. at the 2011 TMA Distressed Investing Conference in Las Vegas.

Meeting with several of my colleagues (and future panelists) the other day, the conversation kept turning to how loan to own strategies are viewed in comparison to other bankruptcy strategies where similar factors are at play.

Control. Cash. Competition. Common enough – but when did getting the most value for your distressed company, or ensuring payback of your secured debt, require that you first past a litmus test of good faith?

Innkeepers in the Southern District of New York comes to mind as a recent example. There was a plan, and there was coordination, but the control was too great; the plan support agreement was thought to go too far. Or consider DBSD North America, also in the Southern District of New York: The timing of the investors was critiqued, motivations were questioned and “strategic” somehow became a dirty word – not only by the bankruptcy court, but by the larger media. Certainly industry and economic stressors have heightened our sense of caution in the past couple of years, but, when a distressed company needs an infusion of capital, when did we start to care about investors’ motivations, and why? Don't most applaud the efficiency of a debtor charging into bankruptcy with a pre-packaged plan or fast-tracked 363 sale with a stalking horse bidder?

What’s the difference? And why does it matter? It undoubtedly matters to certain bankruptcy courts and judges – pick up a paper and you’re likely to see some mention of a loan to own gone sour – but what distinguishes the investment opportunity, roles, strategy and timing of loan to own from other debtor-controlled situations? Should good faith be, as some have proposed, a baseline duty for investors, co-existing with fiduciary duties?

From the concrete decisions and our collective experiences to the larger theoretical issues, and back to the practical: How can one best prepare for a successful loan to own strategy? Join us January 26-28 in Las Vegas at the 2011 TMA Distressed Investing Conference to explore these issues in-depth, and take-away our rules of the road to help you best strategize—whatever side you may fall on.

Forecast on Distressed M&A and the Shape of the Economic Recovery in Canada

2010-12-15T15:53:00.000-08:00

We thought it might be helpful to provide Turn the Page blog readers a brief overview of distressed M&A activity in Canada.

The obvious distinguishing feature of the current Canadian recession is speed — the speed of the descent and the apparent speed of the recovery. It remains to be seen whether the recovery takes the steep “V” shape some economists predict, a long and gradual climb out, or a bumpier, up-and-down “W” path out.

Certainly, Canada’s productivity gap and lagging consumer confidence combined with a climbing dollar are trending toward a slower recovery. Canadian industry sectors relying on U.S. demand likely face a long climb ahead.

There were four key features of the Canadian recession impacting upon distressed M&A:

No liquidity
No bottom
No buyers
Patient creditors

We have identified at least two “stages” in the evolution of the distressed M&A market which we extrapolate to suggest a possible third stage. While not cleanly separated or clearly identifiable, the first two stages suggest a general trend and provide insight into the third.

Stage I: No Deals

Once the 2008 financial crisis had hit the U.S. and then Canada, and for many months following, virtually no distressed businesses were being sold as going concerns. Liquidation scenarios were equally grim, with traditional liquidators opting out of entire asset classes.

A decline in “healthy” M&A in both countries was expected, but the absence of a robust distressed M&A market was not. With no bottom in sight, even liquidators and buyers stayed out of the market. No liquidity meant no PE/Hedge funds were acquisitive since their models required debt to make their deals work. Many creditors took a wait-and-see position. The result: Buyers were holding out for a fire sale and lenders were not pushing assets to market.

Stage II: Bottom in Sight, Limited Liquidity, a Few Buyers and Secured Creditors Starting to Lose Patience

In this second stage, distressed acquisition funds and strategic buyers consider acquiring distressed businesses which were market leaders or niche players. Troubled entities were selling, but in relatively small numbers. Since buyers focused on businesses that complement their own, deals remained hard to close and prices remain low. Moreover, the recovery of the equity markets ahead of the grassroots economic recovery created a price expectation gap. In some cases, existing lenders to a distressed target were financing the acquisition to avoid even lower pricing.

With trouble continuing to plague creditors, insufficient liquidation values to drive “going concern” sales and few buyers, Stage II was not conducive to a high volume of distressed M&A activity.

Stage III: The Future: Exiting the Recession, Increased Liquidity, More Buyers and Impatient Secured Creditors

As mentioned, distressed M&A activity in the coming months will depend on whether the recovery tracks the “V” shape; a long, gradual incline; or the slower and bumpier “W” model. With a quick recovery, fewer businesses will be sold as increased cash flow will sustain them through the recovery. Traditional M&A activity appears to be returning but the targets remain few and far between.

If the recovery stalls or becomes a bumpy “W,” creditors who have been patient may finally start pulling triggers. With floor asset and going concern values being hit and with the return of some liquidity, the pieces are in place for increased distressed M&A activity in 2011 should the recovery stall (but not reverse).

For a more detailed analysis, visit:

http://www.gowlings.com/Services/distressed-m&a

http://www.gowlings.com/trendwatch/pdfs/2_forcast_on_distressed_MA_-_the_shape_of_the_economic_recovery_EN.pdf

David F.W. Cohen is a partner with Gowling Lafleur Henderson LLP and the Leader of the firm’s National Restructuring and Insolvency Practice Group. He is also a member of the TMA Board of Directors and the incoming V.P. of Membership for 2011. His contact information can be found here.

Not So Fast - Colleague Warns Not to Get Too Excited Over Black Friday Results

2010-12-08T12:23:00.000-08:00

In discussing last week's posting about the success of Black Friday, colleague Peter N. Schaeffer, partner, Carl Marks Advisory Group LLC, warned about getting too excited about the recent results and mentioned his recent newsletter written about the topic. I thought I would share the article with you.

Strong Black Friday sales propelled retail results for November and put retailers and retail investors in giddy moods as visions of sugar plums and hefty sales figures drove stocks higher. Don't be fooled by four days of intense markdowns, record-breaking advertising, dramatic press coverage and, for the first time, the use of the "Black Friday" moniker in most advertising and news reports about the weekend.

Of course, the malls were mobbed. Christmas is less than a month away, and if you were willing to rise at 3 a.m. on Black Friday, plenty of good deals awaited you. Shoppers always pack the malls on Black Friday and the weekend that follows. Our friends in Canada look on with envy at the United States because of the "official" start to the shopping season on the day after Thanksgiving. The rest of the world does not have this shopping delineation and realizes the value of an official start to the holiday, which encourages spending and concentrates advertising and promotions to a tight window.

There is no escaping the fact that sales were strong and certainly encouraging, but let's not forget the margin implications of the radical markdowns and the fact that many people use the holiday weekend to do most of their seasonal shopping. Just how much money remains to be spent is the big question, and will this number propel sales higher than the anemic results of the past two years?

Looking at same store sales results for November, one is struck by the number of retailers with positive numbers. This is in contrast to major negative results in 2008 and 2009. Yet, most retailers are quick to forget what numbers they actually are beating. For example, Abercrombie & Fitch had stellar results for November, with same store sales rising 22 percent. However, last year A&F's same store sales dropped 17 percent, and in 2008 they dropped 28 percent. It's amazing how once A&F learned to promote itself, sales went up. But, if you look at its same store results over the past three years, the company is actually doing only 73 percent of the business that it was doing in 2007. Obviously, the numbers are not entirely accurate due to store closings and other factors but still reflect the sad fact that many retailers have lost significant business over the past several years.

Some of this loss has moved to the Internet, where record sales are made daily and sales penetration is eroding results of the brick-and-mortar stores. This year, the proliferation of free shipping, by just about everyone on the Web, will impact Web margins which, in the case of brick-and-mortar stores with strong online businesses, already reflect the sale prices available in the stores.

Reports from the field regarding sales this past weekend were mixed but generally soft. There is no indication that Black Friday's strong showing is continuing. With the exception of the luxury sector, it looks as though 2010 results will be better than 2009, but not by much. The luxury sector continues to outperform as wealthy patrons are less intimidated than they were last year and are returning to their favorite retail haunts. In addition, solid results on Wall Street and the weakened dollar have propelled luxury sales in New York, which can affect total sales due to the size of the New York market.

We don't want to be Scrooge and ruin the holidays with dour comments and a bleak outlook, but don't be naive and believe all that you read, because the retail economy isn't nearly as good as it seems.

Black Friday Success Brings Encouraging News for Retailers

2010-11-29T14:15:00.000-08:00

Early reports suggest that Black Friday was successful for both online and store retailers. More people hit the shops than last year and online shopping increased significantly over the holiday weekend, prior to “Cyber Monday” when online sales are expected to receive another boost.

The traffic at stores nationwide on Friday increased 2.2 percent over last year’s figures, though spending only increased 0.3 percent, both according to research group ShopperTrak. The slight rise in sales may reflect consumers’ ability to find the best deals online, as Internet sales increased 33 percent over last year on Thanksgiving, while on Friday, sales increased 15.9 percent, according to Coremetrics.

Perhaps the most encouraging statistics were the increased number of shoppers and average amount spent per person from Thursday to Sunday. An estimated 212 million people shopped, up from 195 million last year. That is the highest number of Thanksgiving weekend shoppers since the first survey in 2004 according to The New York Times.

The average spent was about $365, more than a 6 percent increase over last year, according to a survey of about 4,300 Americans by the National Retail Federation.

Consumer confidence appears to be on the rise as well, as the National Retail Federation data indicated shoppers were not only buying gifts, but buying for themselves. Increases in purchases of discretionary items such as jewelry and electronics show that consumers are more willing to splurge on big-ticket items for their own use.

Though these increases may signify that perhaps the economy is indeed slowly on its way to recovery, turnaround professionals do not foresee that Black Friday success and optimistic holiday sales projections will significantly aid U.S. retailers and manufacturers.

“While Black Friday sales appear encouraging they come at the expense of flat or decreasing profitability due to the deep discounting that is occurring to build up volume and deplete inventory,” says Kenneth J. Dalto, principal, Kenneth J. Dalto & Associates of Farmington Hills, Mich. “This will have little effect on the fate of the retailers, who will continue to struggle, especially in the first and second quarters of 2011.”

About 80 percent of respondents to a recent Turnaround Management Association survey said increased holiday sales projections would be insufficient to lift domestic manufacturing orders. If any increase occurs, it will be slight, some said, because retailers are loath to incur excess post-holiday inventory.

Burlington Coat Factory Financing Deal Pulled - What are the Implications?

2010-11-19T10:45:00.000-08:00

The froth of the high yield market and the volume of leveraged recaps by equity sponsors have been widely reported. Many in our industry have opined that the high level of deal flow is hiding the problems of troubled companies as they are able to ink deals for new financing at better pricing or on covenant-lite terms that rival what we saw before the credit market contraction of 2008. We are used to seeing reports like Debtwire’s calculation that $26 billion in new issue bonds were marketed in the month of October alone. We restructuring practitioners bemoan that these deals are shifting the debt “maturity wall” out even further to 2013 or beyond.

So, it was interesting to note yesterday’s report that Burlington Coat Factory’s $1.5 billion refinancing/dividend recap was pulled after investors pushed back on pricing offered based upon the ratings assigned to the deal (read the Bloomberg article). One deal certainly does not make a trend and maybe the market simply wants to see how retailers perform this Christmas season. In any case, we should bookmark this one and see where things go from here.

Your thoughts?

TMA Mourns the Passing of a Friend - Jim Matthews

2010-11-14T19:48:00.000-08:00

I was notified by Pat Lagrange and Lisa Poulin, TMA’s chairman and president, respectively, that Jim Matthews passed away Friday, November 12. Pat and Lisa wanted TMA’s leadership to know of Jim’s passing because he had been a dedicated member of TMA’s leadership on the local, regional and national level for many years.

We are lucky to know a lot of people professionally, and we see these folks year in and year out in the course of our professional lives. We remember quite a few and usually, it’s because they touched us in some way. I met Jim Matthews about 10 years ago at a TMA conference. I remember him because he always took the time to talk about opportunities, even though at the time, it was very unlikely that there was anything in our relationship for him. Nonetheless, Jim would take the time to consider how we might work together and I had always hoped that we would find a way to do so. I last saw him in the fall of 2009 and once again, we discussed current developments and opportunities.

I was saddened greatly to learn of his passing – to me, he was a young 60. Our association has lost a great member and leader. Personally, we have lost a friend. For those who would like to know the official details, I’ve reprinted his obituary below.

James B. "Jim" Matthews, age 60 of Rowlett, TX, passed away November 12, 2010. He was born April 4, 1950, in Newton, MA, to Gerald and Charlotte (Boisvert) Matthews. A consultant in commercial real estate, Jim was a member of Rotary Club and the Turnaround Management Association (TMA), local and national. He was married to Carol Butler on October 19, 2002, and was devoted to his home and family. Jim earned his Bachelor's Degree from Assumption College in Worcester, MA, in 1972 and his law degree from the University of Miami (Florida) in 1974. He started his own business, Prime Location, in 1983. Jim tackled the daily challenges as new opportunities. He published numerous articles and was a regular speaker for the American Bankruptcy Institute, TMA and the International Conference of Shopping Centers. In 2003, the TMA honored Jim with its Outstanding Individual Contribution Award. His non-profit activities included the Rotary Club of Preston Center in Dallas, TX (president 1993-94); TMA Dallas Chapter (president 1995 and 2000); TMA National Board Member (1995-2005; vice president of Chapter Relations 2001-2003).

In 2005, Jim co-sponsored a group for small business recoveries after the Katrina disaster in New Orleans. He was brilliant, wise, generous, fun loving, kind and determined. One of his greatest joys was making a child laugh. The world is a better place because of Jim. The eagle is the only bird which flies into a thunderstorm. Friday this eagle flew home. Jim is survived by his wife, Carol Matthews of Rowlett; son, Greg Matthews of Dallas; father, Gerard Matthews of Plainville, MA; stepchildren, Cathy Hanson and Chris Delk; grandchildren, Michael, Erika, Andy, Jack and Emily; sisters, Charlotte McMahon, Maryclaire Quine and Ann-Marie McCarthy; brothers, Michael and Daniel Matthews; 14 nieces and nephews; and 19 great nieces and nephews. He was preceded in death by his mother and brother, Gerard J. Matthews, Jr., in 1993.

Services will be held 11:00 am Tuesday, November 16, at Rest Haven Funeral Home-Rockwall Chapel with Daniel Prescott officiating. The family will receive friends at the funeral home Monday from 6:00 - 8:00 pm. Memorials may be made to the American Cancer Society. Services under the directions of Rest Haven Funeral Home, Rockwall, TX.

Rest Haven Funeral Home in Rockwall
2500 State Highway 66 East
Rockwall, TX 75087
972-771-8641

Holiday Cheer Brings Refinancing Deal

2010-11-10T07:43:00.000-08:00

The sparkling lights projecting from the Cobb Energy Performing Arts Centre was the yuletide pickup my colleagues and I needed after weeks spent searching for answers to save a company. Little did we know we would find a solution at the annual holiday party organized by the Atlanta TMA Chapter and the Atlanta Commercial Finance Association. The festivities spread over three floors, with a bar in the lobby, hors d’oevres on the second level and desserts on the third. Approximately 150 people were there with gifts for the Toys for Tots program.

Rob Barnett, Paul Share and I were planning to attend that evening but we were having difficulty mustering the enthusiasm to go out and put on our happy faces. It appeared as though our case was on a cheerless course that I had seen before, ironically, during the holidays. In those cases, the client either: a) endured the misery of managing the liquidation of their business or b) suffered through painful staff layoffs.

Our client, a cabinet manufacturer and supplier to multi-family housing developments, had reached the end of the line with its lender. The company was in default again and the lender closed the door on further funding.

Our team began developing an efficient and value-driven wind down plan and called potential investors and other lenders as a last-ditch effort to save the company. Management had cut to the bone and reached a break-even level. The lending freeze persisted, so we knew we could not count on refinancing. The cabinet maker had significant collateral, but its assets were heavily weighted to equipment and real estate.

The dread of the onset of an upcoming liquidation process was upon us.

With mellow strains of a four-piece jazz ensemble playing holiday music in the background, Rob, Paul and I made the rounds. Rob struck up a conversation with Jim Miller of FirstCity Crestone (FCC). Jim began to talk about his current business interests and something just snapped into place: FCC might be a good fit for the cabinet maker. It offered a unique approach - a hybrid of asset-based lending and private equity investment.

The team receives the Transaction
of the Year Award at the 2010 TMA
Annual Convention.

That conversation was the beginning of a deal that saved the company, retained 180 jobs, and allowed the senior lender to be repaid in full. Our team also earned the 2010 TMA Transaction of the Year Award in the small company category. Read about it here.

That holiday party represents a great example of why TMA matters in our business. It’s an example of the importance of networking and the role the Association can and does play in providing opportunities to network.

The holidays are here. Put your best foot forward.

Best wishes!

From Bankruptcy Court to the World Series

2010-11-01T14:54:00.000-07:00

When Nolan Ryan and his ownership group paid $593 million for the Texas Rangers in a bankruptcy court auction in August, it's hard to imagine they envisioned their investment would pay off only a few short months later. But following its first postseason series win and first World Series appearance in the team's 50-year history, the timing couldn't have been better for the new owners.

Win or lose against the San Francisco Giants this week, the Hall of Fame pitcher and his ownership group stand to potentially increase the team's value by $50 million to $100 million based on their postseason run, according to a recent Bloomberg article. The story estimates the Rangers' advancement to the World Series to be worth $40 million next year in increased ticket sales, sponsorships, suite rentals and concessions, in addition to taking in $1 million per game in gross profit from this year's playoffs. It's also estimated that "baseline attendance" for the Rangers will increase for five years.

Considering that prior to emerging from bankruptcy court, the Rangers were in need of a $21.5 million loan from the league to pay its bills, the outlook couldn't be much better for Ryan and his ownership group. Even with the Rangers facing elimination from the Giants.

TMA Member Article Published in TheStreet.com "5 Biggest Business Mistakes"

2010-10-27T14:11:00.000-07:00

Today, I read an interesting article by a TMA member from Portland, Renee Fellman, CTP. Renee’s article, “5 Biggest Business Mistakes,” was published in TheStreet.Com on October 18. Renee makes some great points, many of which will be familiar to experienced turnaround professionals. Hindsight is 20/20, so I think it best to look to the lessons that each of the case examples offer (Blockbuster, Toys “R” Us, Sears, Borders and BP) and apply them as we all work through our client’s troubles. The mistakes always seem so clear in hindsight, but the best go-forward strategy always seems difficult to identify or implement. I think being able to work through these problems by applying the lessons from the past is the effective turnaround advisor’s key strength. Much of this strength comes from objectivity, since sometimes when we’re mired in the problems, the solutions, though right in front of our faces, are difficult to see. Thanks to Renee for highlighting these issues and to TheStreet.com for publishing Renee’s article. See the article by clicking here.

Where Does Your Newspaper Rank? Circulation Continues to Decline

2010-10-25T15:17:00.000-07:00

The biannual circulation report was released today and the only major newspaper showing a significant increase is The Wall Street Journal, which has help from paid e-subsribers and iPad and mobile subscribers.

While the circulation losses have slowed further, to a 5 percent daily drop in the most recent report from an 8.7 percent decline in the spring report and a 10.6 percent plunge in the report one year ago, as reported by Advertising Age, the numbers could potentially impact the turnaround industry. Read more about the report and see where your newspaper ranks.

As always, let me know what you think and post any comments below.

What’s in a Number? 13 Reasons to Register for 13-week Cash Flow Webinar

2010-10-18T13:09:00.000-07:00

Next Tuesday (Oct. 26, Noon – 1:00 p.m. EST) I will be moderating “13-week Cash Flow: What’s in a Number? The First 13 Weeks May be Everything.” The webinar is part of the TMAccess education program. Learn more about TMAccess and register for the webinar at turnaround.org.

Why should you or other members of your firm participate in this webinar? I’ll give you 13 reasons:

The 13-week cash flow (TWCF) model is the short-term forecast preferred by practitioners, lenders, creditors and most other constituents.
A properly prepared TWCF provides a company and all of the constituents with a roadmap to the ultimate exit.
A TWCF illustrates a company’s cash sources and uses, and any operational shortfall must be provided for through the anticipated exit date.
TWCF provides much needed visibility for direct materials, direct labor and selling expenses as individual components.
It helps assess poor collection of receivables, ineffective vendor strategies, or a high fixed-cost burden – all of which may have been buried in other types of financial forecasts.
The TWCF is an illustrative document that removes some of the obfuscation that can be a part of accrual accounting.
Often the TWCF provides a dose of reality to management teams that are in denial.
An accurate TWCF is integral to building credibility and trust between management and lenders in a turnaround.
For creditors or other providers of capital, the company’s TWCF should be a critical element of the credit or investment process.
Without a TWCF at the inception of the acquisition, an acquirer cannot be certain of the short- to medium-term capital needs of the business.
It’s critical for a company’s business and strategic plans, as quantified by the TWCF, to be both accepted by parties in interest and stakeholders and consistently executed by the company.
Management that consistently meets its TWCF goals will have an advantage in completing a turnaround in a timely and effective manner.
The TWCF model is the accepted industry standard in all corporate renewal situations because of its practical applicability to its users and its effectiveness as a communication tool.

Webinar Presenters

Moderator: Frank R. Mack, CTP, Accretive Solutions Capital Partners, Inc.

Panel: Robert D. Katz, CTP, Executive Sounding Board Associates Inc.; James M. Macdonald III, JP Morgan Chase Bank Chase Business Credit; and David W. Wirt, Locke Lord Bissell & Liddell LLP

Wall Street Journal Blog Features TMA Survey Results

2010-10-15T14:28:00.000-07:00

The Wall Street Journal's Bankruptcy Beat blog featured the 2010 TMA Trend Watch Survey results today. Read the article.

Turnaround Industry is in Transition During Uncertain Economic Times

2010-10-14T13:45:00.000-07:00

The results are in from TMA's recent Trend Watch survey and the results paint a picture of an industry in transition during uncertain economic times.

The uncertainty has led many of those in the turnaround industry to believe the number of engagements and estimated revenues for this year will remain flat or decrease. The outlook is brighter for next year, however, as more than half the respondents expect revenues to increase by 10 percent or more in 2011.

Another interesting trend highlighted by the survey results is that 70 percent of respondents said most of their work has occurred outside of bankruptcy court this year, which is significantly up from 42 percent last year.

Find out more of the results at turnaround.org, where you can view the Trend Watch Survey news release and charts showing the poll results.

I'm interested to hear what you think. Post your comments by clicking on the link below and tell us if you agree or disagree with the survey results.

Wall Street Journal Reports "Executives Quicker to Call Restructuring Advisers"

2010-10-13T08:03:00.000-07:00

Executives at rocky companies are pulling their heads out of the sand and starting to seek restructuring advice sooner, said David Kurtz, co-head of investment bank Lazard Frères & Co.’s restructuring group, during "The New Chapter 11 Playbook" session at last week's TMA Annual Convention. Read more insights from the session in an article by the Wall Street Journal.

Please share your thoughts about Kurtz's comments or the article by clicking on the link below to add comments.

Jeb Bush Annual Convention Keynote Address Recap by Wall Street Journal

2010-10-13T07:46:00.000-07:00

Bush presented his keynote
address on Thursday, Oct. 7.

The Wall Street Journal provided a great recap of the keynote address presented by former Florida Governor Jeb Bush at last week's 2010 TMA Annual Convention in Orlando. Read the article to find out what Bush had to say about the handling of the General Motors and Chrysler bankruptcies by the Obama administration and his brother, former President George W. Bush, and more.

Orlando Wrap Up

2010-10-12T08:44:00.000-07:00

For those of you who missed TMA's Annual Convention in Orlando last week...you missed a great conference. Not to worry. Most of the panels and speakers will be available on demand through TMAccess, our comprehensive online education resource. Watch for a link on the TMA Web site in the coming days that will let you access the videos.

Over 550 attendees found out that the conference offered much more than great panels. The opening reception was one of the best networking functions I've attended this year. I was able to reconnect with a number of people I haven't seen in a long time. Maintaining relationships will be the key to deal flow in these interesting times.

Many firms had dinners and other events after the opening reception on Wednesday night for targeted networking. Then, on Thursday, TMA hosted a dinner event with humorist Dave Barry who shared with us some hilarious observations on life, our business and using the internet.

Congrats to the TMA staff and volunteers for a job well-done.

Don't forget, TMA's next conference is the Distressed Investing Conference in Las Vegas....January 26-28, 2011 at the Aria Resort. Watch your e-mail for more info.

Ex-Felon Shares MCI White-Collar Crime Story

2010-10-08T07:59:00.000-07:00

Walt Pavlo shared his very personal story of white-collar crime during the Ethics Track of TMA's 2010 Annual Convention in Orlando on Friday morning.

Walt provided a candid look into the motivations, actions and consequences of the crimes he committed while working as a senior manager at MCI Telecommunications. His unique perspective provided great insight into the process of how white-collar crimes are committed.

At MCI, Walt was responsible for the billing and collection of nearly $1 billion in monthly revenue for MCI’s carrier finance division. Along with another member of his staff and a business associate outside of MCI, Walt began to perpetuate a fraud involving a few of MCI’s customers. When the scheme was completed, there had been seven customers of MCI defrauded over a six-month period resulting in approximately $5 million in payments to the Cayman Islands.

Bush Offers Turnaround Suggestions During Keynote Address

2010-10-07T07:19:00.000-07:00

Former Florida Governor Jeb Bush offered three suggestions for the turnaround of the U.S. during the opening session of the TMA Annual Convention this morning.

1.) Roll back the power of the government.

2.) Embrace American exceptionalism on the domestic front.

3.) Leadership matters in effecting transformation.

What are your thoughts? Please share your opinion by using the comments feature of this blog.

Golf and Tennis Tournaments Provide Unique Networking Experiences

2010-10-06T14:21:00.000-07:00

(From L-R: Pat Lagrange, Mark Beceu,
Bob Eckback, Tom Kim)

We had a great golf tournament today - weather was excellent, but for a little wind. We had a full house and a robust competition. First place went to the team of Jeffrey Cohen, Bill Forrest, Mark Reynolds and Jim Whitney, with a score of 69. Second place went to Henry Baer, Amy Lynne Long and Mike Von Lehman with a score of 70 (they won the tie breaker since there were two teams at 70). Third place went to David Baker, Don Giuseppi, Tom Pabst and Robert Schwartz, also with a score of 70.

There were two skills competitions - one each for women and men. The closest to the pin was won by Maria Chang and Greg Hengehold. Long drive was won by Maria Chang and Dan Kerrigan.

Congratulations to all the winners and thanks to all who participated.

A special mention and thanks to our golf tournament sponsor, Hilco. Thanks also go to Cole Taylor Business Capital and Myron Bowling Auctioneers for sponsoring our refreshment cart. Lastly, thank you to O'Keefe & Associates and Anderson Bauman Tourtellot Vos & Company for their hole sponsorships.

TMA also held a tennis tournament at the JW Marriott Grande Lakes. Congratulations to the first place winners, Peter Seckel and Richard Hauer, and the second place winners, Morten Kucey and Paul Kelly.

For both the golf and tennis tournament participants, this was a great way to start the 2010 convention experience and to spend quality time together. We look forward to a great 2010 TMA Annual Convention.

Congratulations to the 2011 Officers!

2010-10-06T08:24:00.000-07:00

Congratulations to the 2011 TMA officers, who were approved during yesterday's TMA Board of Directors meeting at the Annual Convention in Orlando:

Chairperson
Lisa M. Poulin, CTP
Partner, CRG Partners Group LLC
Bethesda, MD

President
Mark S. Indelicato
Managing Partner, Hahn & Hessen LLP
New York, NY

Immediate Past Chairperson
Patrick C. Lagrange
Managing Director, Carl Marks Advisory Group LLC
New York, NY

Vice President - Chapter Relations
J. Scott Victor
Managing Director, SSG Capital Advisors LLC
West Conshohocken, PA

Vice President - Education
Noel Boeke
Attorney, Holland & Knight LLP
Tampa, FL

Vice President - Communications
Cathy L. Reece
Attorney, Fennemore Craig
Phoenix, AZ

Vice President - Finance
Thomas M. Kim, CTP
Senior Managing Director, r²advisors, llc
Denver, CO

Vice President – International Relations
Alan Tilley
Principal, BM&T LLP
London, GBR

Vice President - Membership
David F. Cohen
Partner, Gowling Lafleur Henderson LLP
Toronto, Ontario, Canada

Vice President - Conferences
Brad Coulter, CTP
Director, O’Keefe & Associates Consulting
Bloomfield Hills, Michigan

Vice President - Certification
To be Nominated by the
Certification Oversight Committee

Corporate Secretary
Ronald R. Sussman
Partner, Cooley LLP
New York, NY

TMA Governance Behind the Scenes

2010-10-04T12:30:00.000-07:00

The Opening Reception at TMA's Annual Convention is one of our industry's most important networking events of the year. Nearly all attendees make sure that they are at the convention site in time to attend the reception before heading out to one of private dinners that are usually held that evening.

What many of our members don't focus on when making their plans is the full day of TMA governance meetings that precede the start of the convention. At these meetings, our Board of Directors, Executive Committee, Chapter Presidents' Council, Certification Oversight Committee and a number of other task forces and committee meet to conduct the business of our association. The meetings usually are the culmination of months of behind the scenes work by TMA's dedicated volunteer leaders and staff. Conferences and webinars are planned, chapter leaders share best practice ideas, and the overall direction of the association for the upcoming year is set.

At the Board of Directors meeting on Tuesday, our Board will elect TMA's new officers from a slate recommended by our association's Nominations Committee, which began work back in April.

All Board of Directors meetings are open to the entire membership. If you want to know more about the direction of our association, please come... and of course, please don't hesitate to raise your hand to join one of our committees. Committee membership is one of the best ways to get more value from your TMA experience. You will have a chance to work closely with other professionals and get to know them while at the same time helping advance the mission of TMA.

So consider this your open invitation to join us at the Board meeting and to get involved in your association.

See you in Orlando.

2010 TMA Annual Convention Preview

2010-09-27T09:55:00.001-07:00

Our association’s 2010 Annual Convention is being staged in the midst of a time of tremendous change in our industry. The surge in high yield debt activity and the tactical use of loan modifications, extensions and covenant relief have led to default rates falling to back to pre-recession levels.

The 2005 changes to the Code have made bankruptcy processes faster and accelerated the trend toward transactions at the expense of the traditional operational reorganization. Together, these trends are leading to fundamental shifts in the practice of turnaround management and corporate restructuring. The convention program has been developed with an eye toward understanding this evolution and the opportunities that will be created for those of us in the industry. We’ve brought together leading experts to provide insight into real estate restructurings, prepackaged and pre-arranged bankruptcies, and the current dynamics of the lending and equity markets.

Our program also includes a judge’s panel discussing the availability of credit bidding, a distressed investing expert panel providing insights on the future of distressed capital markets, and an ethics panel including first-hand experience from a former white-collar criminal. We are excited to also be joined by our outstanding keynote speakers, former Florida Governor Jeb Bush and former Harley-Davidson CEO Richard Teerlink.

Also, as always, TMA will have plenty of first-rate networking opportunities and activities around the Grande Lakes resort to make the Convention experience a special one. Finally, I’d like to thank our conference chairs Ira Genser and Noel Boeke as well as their entire committee and the dedicated TMA staff for all of their hard work in staging the Convention. I’d also like to thank our sponsors for their financial support of TMA and this Annual Convention.

Again, welcome, and I hope that you enjoy the conference and spread the word about all that TMA has to offer.

Welcome to Turn the Page

2010-09-27T08:41:00.000-07:00

Welcome to Turn the Page, a new blog that was developed to serve as an interactive communications resource for the Turnaround Management Association and its members. As chairman of TMA, I will author Turn the Page and will provide insight about the corporate renewal industry, share TMA information and discuss topics that are relevant to the TMA membership. In addition, additional guest authors also will share their thoughts from time to time.

I encourage you to subscribe to this blog and visit the site often for frequent postings and to share your own comments. I'd like Turn the Page to be as interactive as possible and want to make sure we're writing about the topics that mean the most to you. So if you have any suggestions or topic ideas, please feel free to share them with me.

With the 2010 TMA Annual Convention taking place next week, Oct. 6-8, in Orlando, I will be blogging about the event throughout the week from Florida. For those of you unable to make it to Orlando, this will be a great opportunity to learn more about TMA's annual event.