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October 2011

Turnaround Management
Vol. 9 No. 7
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Treading Water — The New Normal for Top-Line Growth … Or Surviving the Challenges of a Persistent Low-Growth Environment - The U.S. economy has an important adjustment to make. Heading into the second half of 2011, it is essentially treading water. Four years after the first rumblings of the credit crisis, middle-market companies and their lenders are facing the fact that the United States will not be escaping this economic malaise any time soon.
Using Emotional Intelligence in Distressed Assignments… Don’t Forget to Bring Your Golf Clubs - Working with distressed companies is challenging because of the constant need to take action amid uncertainty and stress. Emotional intelligence is a key tool to help navigate these situations and to develop flexible leadership styles that have the highest probability of success. Using emotional intelligence in these situations will improve leadership effectiveness and project outcomes, and will leave a long-lasting impression with clients and stakeholders.
Help Wanted! The Case for Restructuring the Franchise Business Model - Many restaurants operate within the franchisor/franchisee business model, and these relationships have become particularly strained in the current economy. When times are tough, franchisees typically respond by taking steps to improve operations and preserve the bottom line across stores. These changes can range from minor belt-tightening moves to closing one or more unprofitable locations. Unfortunately, many restaurant franchisees do not currently have the flexibility needed to make changes at the local level due to strict and complex franchise agreements.
Anatomy of a Turnaround — Managing Expectations and Achieving Results - There are numerous times during the course of a restructuring and financing that the situation can turn for the worse. Providing assurances and guidance to all parties involved will assist in a successful outcome even in the worst circumstances. Advising clients, lenders, customers and vendors is equally important in gaining common ground and resolution for a successful restructuring and financing.
Retailers Will be Disappointed with 2011 Sales — Big Picture Pressures the 4% Forecast - The National Retail Federation optimistically forecasted a 4% increase in sales for 2011, which would be the largest gain in five years. Are you willing to bet your company on it this holiday season? CRG Partners’ Gary Lembo doesn’t think that’s a good idea.
Surviving the Long-Term Workout - As much as a troubled borrower and its lender might like to part ways, finding a new lender to take out the existing lender at par may be a difficult objective to accomplish. . . . Finding a way to successfully navigate these long-term workout situations could represent the difference between a costly write-off for the lender and a successful loan restructure with a rehabilitated borrower. Turnaround professionals are able to assist in these long-term workout situations by serving as a bridge between the two parties.
CFA Annual Convention: Connect, Grow & Succeed - For the first time in over 20 years, the Commercial Finance Association’s Annual Convention will be held in New York City. The convention will take place November 16-18, 2011, at the New York Marriott Marquis. CFA’s annual convention is the largest gathering of asset-based lending and factoring professionals and offers unparalleled networking and educational opportunities. The event attracts professionals from around the world involved with asset-based lending, factoring, appraisals/auctions/liquidations, turnaround management and commercial finance law to collaborate on issues in commercial lending.


FTI’s New Co-Leaders of Corporate Finance & Restructuring: For a Couple of ‘Client Service Guys’ Optimism and Opportunity Abound - This summer, ABF Journal readers learned that Robert (Bob) Duffy and Kevin Lavin had been appointed to co-lead FTI’s Corporate Finance/Restructuring practice thereby joining the executive committee comprised of practice leaders of the firm’s five key business segments. While many would fret at what lies ahead in this relatively slow period for traditional restructurings, these self-admitted “client service guys” only see advantages and opportunities.



In the Midst of Change… TMA’s Executive Director Offers Some Parting Thoughts - Last spring, Linda Delgadillo, executive director at the Turnaround Management Association announced her intention to retire at the end of this year. We asked Delgadillo to look back at her remarkable 11 years with the association and speculate on the direction it may take in the coming year.


Leveling the Playing Field: Seventh Circuit Rejects Philadelphia Newspapers; Upholds Secured Lender Credit Bid Rights in Cram Down Plans - During the last bankruptcy boomlet of 2008-09, many borrowers found themselves faced with lending groups led by aggressive, non-traditional lenders that used the an event of default as an opportunity to force an acquisition of their business. As such, borrowers used the protections of the Bankruptcy Code to try to stave off what they viewed as opportunistic takeover attempts by their lenders. At the center of many of these cases lies the lenders’ right to credit bid. Here we look at two such cases.


What Factors Expect… Great Expectations for 2011 - The 2011 IFA Business Profile & Performance Survey was distributed to factoring industry members in January 2011. The purpose of this comprehensive study was to provide factoring industry members with information that could be used to benchmark their own individual performance. ABF Journal reviewed the 150-page report to provide readers with a sampling of the data along with commentary gleaned from the survey.


To Improve or Not to Improve? Pre-Disposition Preparation and Processing of Collateral - What constitutes commercial reasonableness in preparing and processing collateral for disposition is not expressly set forth in the Uniform Commercial Code. A general rule of thumb has developed under UCC lore: the secured creditor about to dispose of a car on default should wash the car, but probably should not overhaul its engine. This crude example is clear enough, but in between the two extremes of washing a car and overhauling its engine lies an immense middle ground.


FinalCut: Bank Competition Spurs Asset-Based Loan Boom - ABF Journal illustrator, Jerry Gonzalez’ visual interpretation of a top-ranked news story according to our visitors.

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