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January/February 2011

Risk Management & Fraud Prevention
Vol. 9 No. 1
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M&A, Capital Markets Update: There’s Improvement for Sure, But We’re Years Away From the Glory Days of High Valuations - In the following article, Tim Stute, managing director and principal at Milestone Advisors, assesses 2010 in terms of merger and acquisition activity in the commercial finance sector. While such activity has increased in the later half of last year, valuations remained low due to lack of competition from banks. In looking forward to 2011, Stute expects steady improvement in M&A activity with modest, yet rising deal values for the near term.
The Grit of the Game … Offense Versus Defense Applies to More Than Just Sports - The period since 2008 has been marred with economic difficulties, recessionary trends and wariness in financial markets. As a result, there has been noticeably less M&A activity. However, looking at the deals that have been announced and consummated, it appears that the transactions over the past few years can be classified as either “offensive” or “defensive” in nature.
Proposed UCC Article Amendments That Will Impact Secured Lending - With Article 9 provisions changing and inconsistencies among the codes of various jurisdictions, maintaining a secure position can be a complex responsibility. Bottom line, secure positions are the lifeblood to an asset-based lender and an understanding of changing regulation is critical to success.
The Fishmonger and the Feds – Unwrapping Ocean Fresh Seafood’s Multi-Million-Dollar Fraud - There was something fishy going on at Massachusetts-based Ocean Fresh Seafood, and it wasn’t just the inventory. By the time Wells Fargo auditors found the source of the smell, they’d been defrauded out of at least $7 million, and the man who allegedly orchestrated the scheme was in the wind. Here’s how it played out…
When is Enough, Enough? Is a Field Audit Program Adequate Protection From Fraud? - The losses lenders experience at the hands of dishonest borrowers can be a very large proportion of the total loans outstanding, and can monopolize a significant amount of lender time. The use of field exams and other financial reviews can help to identify problems at an early stage, thereby allowing the lender time to take action to protect its exposure.


NewStar Business Credit: A CORE Acquisition Creates the ‘Newest Star’ in the ABL Firmament - Late last year, NewStar Financial announced it intended to add asset-based lending to its product offerings by acquiring CORE Business Credit, causing something of a positive stir in the commercial finance community. ABF Journal asked NewStar’s chairman and CEO Tim Conway and CORE’s Michael Haddad to discuss the rationale behind the acquisition.



The Skinny on Workouts — Dynamics in Bank Syndicates - To conclude her three-part series intended to de-mystify the workout banker’s motivations, Kristina Anderson of Carl Marks Advisory Group examines some of the dynamics inside senior lender syndicates and how those dynamics affect the syndicate’s ability to respond in workout and default situations. As Anderson notes, distress doesn’t necessarily have to lead to war.


The Due Diligence Factor — The Importance of Doing Your Homework - Whether you perform your due diligence internally or outsource it, it is important that you do your due diligence before you enter into any lending or factoring agreement. A little homework on the front end will result in a healthy portfolio that is easily managed. More importantly, it will reduce your exposure to unnecessary risk.


Tell It Like It Is … Communicating With Your Lender in Difficult Times - Regardless of the reason, when your business encounters serious challenges, your world shifts. These shifts occur on multiple fronts. One of the most important shifts is on the communication front, and how you interact with financial stakeholders — in particular your lenders, but also your investors, vendors and even employees.


Lemonade Inc. — Giving the Bankruptcy Process a Great Big Hug - In the following article, SmithAmundsen bankruptcy attorneys Patrick Jones and William Hackney suggest that in some distressed situations, it might be time for lenders to take a different tack. Rather than engaging in a fight, a lender might consider “riding the horse in the direction it’s headed” to his or her advantage.


FinalCut: NYT — ‘Great Liquidation’ About to Take Place on Wall Street - ABF Journal illustrator, Jerry Gonzalez’ visual interpretation of a top-ranked news story according to our visitors.

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