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12oct

October 2012

Turnaround Management
Vol. 10 No. 7
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FEATURES

Anatomy of a Turnaround: For the CRO, the Meltdown at Dippin’ Dots Became Personal - After 20 years of success, ice cream maker Dippin’ Dots faced a variety of hurdles due to growing pains, an uncertain economic environment and a deteriorated relationship with its secured lender, which led to its Chapter 11 filing. Conway Mackenzie’s Greg Charleston was appointed CRO to navigate the company toward a new owner while avoiding a potential meltdown. Along the way, he found that working on this case proved to become a more personal experience than many others.
With Fewer Opportunities and Lower Utilization — What Comes Next in Restructuring? - Ongoing sluggish economic growth and high levels of corporate debt created an expectation that post-recession restructuring activity would continue at a reasonable pace. However, as measured by U.S. bankruptcies, the trend seems to have reversed. AlixPartners’ Thomas Osmun and Joseph Mazzotti examine where the bankruptcies have gone, activities that have taken their place and what it means for the restructuring industry.
Annual Turnaround Manager Survey: Reluctance of Lenders to Call Defaults Weighs Heavily on Turnaround Managers - In this year’s Turnaround Manager Survey, respondents noted that even though economic uncertainty was clearly a concern going forward, the majority said that the reluctance of lenders to call defaults weighed more heavily as a concern going forward.
Analysis of a Unique TMA Award Winner: Mesirow Financial, Ungaretti & Harris Rescue Fairview Ministries - The economic recession and attendant weak credit environment hurt many industries, and the senior living housing market was no exception. When Fairview Ministries, a continuing care retirement community, experienced distress, it retained Mesirow Financial Interim Management, that hired a team of advisors — including restructuring counsel, Ungaretti & Harris — to lead it through a major restructuring that included the rescue of over 500 seniors who faced losing their homes and life savings. The outcome was acknowledged as the Small Transaction of the Year award winner by the TMA’s Chicago/Midwest chapter.
Watch Your Step — Insurance Pitfalls Threaten Even the Strongest Turnaround Strategy - Insufficient insurance coverage can be the undetected landmine in a turnaround strategy. Harvey Topitz explains that relying on Certificates of Insurance or Declaration Pages to ensure complete insurance can expose the business — and the turnaround professional — to liabilities presented by endorsements, exclusions and omissions. In short, the large print giveth and the small print taketh away.
CFA Annual Convention: Thriving Through Industry ‘Transformation’ - The theme of the CFA's 68th Annual Convention is "Transformation," and the event features keynote speaker Richard B. Cheney, 46th Vice President of the United States, who will offer insight into the economic and political landscape, past and present. The convention, which takes place November 14-16, 2012, at the JW Marriott Desert Ridge in Phoenix, AZ, 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.
Wipfli Launches Turnaround & Restructuring Practice - Responding to what Wipfli managing partner Rick Dreher calls lingering concerns facing many businesses in the slow economic recovery, the CPA and consulting firm has launched a turnaround and restructuring practice under the leadership of Jeff Baker and David Steichen. Baker, who heads the practice, spent the majority of his career as a partner at PricewaterhouseCoopers, where he completed dozens of transactions in more than 20 countries. Steichen most recently served as principal of Manchester Companies, a Midwestern turnaround advisory firm. The ABF Journal catches up with Baker to discuss the new practice.

FROM ALL FACETS

TURNAROUND CORNER

Passing the Torch…TMA CEO Looks Ahead After First Year at the Helm - In last year’s Turnaround Management issue, we talked with Linda Delgadillo about her tenure as the head of the Turnaround Management Association as she departed from the position after 11 years. The TMA then hired Gregory Fine to lead the association. Here, Fine discusses his first year on the job as well as what’s ahead for the TMA and its members, both here and abroad.

SPECIALTY LENDING SHOP

Bay View Funding CEO Warns of Increasing Occurrences of Fraud - With almost a year under his belt as CEO and president of Bay View Funding, Glen Shu provides an update on the company, its plans for the future, and discusses the factoring industry’s biggest challenge — increasing occurrences of fraud — while offering a solution: keeping the lines of communication open to try to contain the problem before it starts.

BANKRUPTCY UPDATE

Selling Distressed Assets: As Shakespeare Might Say, ‘To 363 or Not to 363, That is the Question’ - While the bankruptcy process is a useful tool for selling a company’s distressed assets, it can come at a significant cost. Lately, more often than not, many creditors, lenders and companies are opting to try an out-of-court approach. Lincoln International’s Joseph Radecki and Jason Solganick discuss the pros and cons to selling distressed assets both in the bankruptcy process and in out-of-court situations.

LEGAL EYES

When Restructuring Reveals Fraud… MainStream Management Uncovers Ponzi Scheme - When MainStream Management's Jim Burritt and his colleagues entered GLC Limited's warehouse, they were stunned to find a rodent-infested mish-mash of food items, chipped pottery and clothing, instead of the appliances they expected. After investigating GLC Limited’s business practices and inventory, MainStream ultimately revealed a Ponzi scheme that had bilked investors out of millions of dollars.

FINALCUT

FinalCut: Hedge Funds Have $74B as Europe Fire Sale Delayed - ABF Journal illustrator Jerry Gonzalez shows that hedge funds and private equity firms have amassed $74 billion to invest in distressed debt in anticipation that Europe’s sovereign-debt crisis will push banks into the biggest fire sale in history. The problem is, few are selling.

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