While it is the common belief that there are two sides to every story, when it comes to the turnaround management industry and the vital role the Turnaround Management Association (TMA) plays for the industry and its constituents, Executive Director Linda M. Delgadillo and the association’s President Lisa M. Poulin see things in a similar light. In a recent interview, ABF Journal sat down with both Delgadillo and Poulin to discuss, among other things, the association’s recent accomplishments and its initiatives going forward as well as the state of the turnaround management industry itself.

The accomplishments have been many and the product of some long-term planning. Delgadillo notes, “A few years back when we were going through a strategic planning process at the TMA, we identified four strategic initiatives and education was at the top of our list. We had been delivering our educational programs primarily through our conferences – that’s what a lot of not-for-profits do – but we decided it was time for the association to move in the direction of online education.”

After careful analysis, Delgadillo explains, the initiative resulted in what’s known today as TMA Access – a 24/7 access to the association’s intellectual property that made its debut at the TMA’s Annual Conference last fall in Phoenix. By the spring of 2010, the TMA was offering two of its core programs online: Thirteen Week Cash Flow and Troubled Loan Workouts. “These are our ‘bread and butter’ courses and we’ve revised some of the content. And we’ve had some fairly good success, especially with our younger members,” Delgadillo says.

Poulin agrees. “Those of us who have been in the industry for a long time and are senior in our firms have the privilege of attending our conferences where you get your educational and networking needs met sort of at once,” the 25-year plus veteran of the corporate renewal world notes. “But if you’re younger in the industry, how do you go about doing that? If you think about it, there isn’t much out there in the way of online sources with a turnaround bent to it, so I’m very interested in making sure that the next generation of practitioners is well trained because our industry serves a major purpose in the business community.”

As for the association’s online future, Delgadillo says the next step includes converting its vast body of knowledge related to its certification program to online courses. “We expect to have that project completed by the end of this year, so there will be fresh content available on management, accounting and finance and law … we’re very excited about that,” she says.

Corporate Renewal, Fare Thee Well?

But what of the corporate renewal industry itself — how is it faring as of late? Delgadillo explains, “What we keep hearing from our members is that they have experienced a slowdown in the market and they aren’t as busy as they would like to be. If you look back over the last two years or so, it’s probably safe to say that most of our members were fully engaged. Yet for some reason, things have started to slow down a bit in the last four to five months. That’s obviously of concern for our members.”

Poulin adds, “I think there’s a bit of slowdown that happens during the summer anyway and that could explain some of it, but I will tell out that out West, our practitioners are seeing a lot of work. But my overall sense is that many people out there are thinking the economy has gotten sort of better and the management of companies has been a bit optimistic … and that’s slowed things down a tad bit.”

Summertime optimism aside, Poulin also attributes part of the slowdown to the changes in the Bankruptcy Code. “These changes have impacted those who might have otherwise filed in the summer … like retailers. I can’t think of a lot of retailers who have successfully come out of bankruptcy because the Code has changed and made it much more difficult. With the changes, a considerable amount of cash is required. And when you have a cash-strapped company filing in the summer, they realize that they may be setting themselves up for a liquidation as was the case with Circuit City. Bankruptcy is no longer the best option – especially as a tool for management in select industries – for survival.”

But, Poulin assures, all has not ground to a complete halt. “That doesn’t mean that there haven’t been out-of-court workouts or sales of businesses. And there are other things happening that involve those of us in the industry. For instance, my partner William Schneider is negotiating the auction for the Texas Rangers … you’ll always have transactions like that and some of the litigation out there will involve industry people.”

Not All ‘Doom and Gloom’

We asked about any bright spots that may have emerged amid this haze of uncertainty. As TMA president, Poulin is encouraged to see, and more than pleased to report, that the banks are back in the lending business. “Oh, they’re back and my sense is that they are being quite aggressive with one another. The troubled situations will always struggle to get financing. But these days, if you have a pulse, you’re likely to get called on by multiple banks. I will tell you as TMA president, we’re encouraged to see the lenders back sponsoring now that they’ve paid back their TARP money. So now that the spigot is back on the banks are back networking. We’re thrilled and delighted to have them back.”

Beyond the banks, Delgadillo marks the vitality of the international affiliates  as another bright spot. “Right now,” she says, “international membership on a percentage basis is the largest growing segment of TMA membership growth. And getting back to the educational initiatives, TMA Access and online availability is a strong factor that will help with international growth because it’s a great way to provide value to our overseas members. Granted some of our materials are U.S.-centric but it’s a good starting point and many countries still look to the U.S. model when it comes to corporate restructuring practices. So we think that what we’re doing with education is going to dovetail nicely into enhancing our international growth.”

“That works well for our affiliates because we’ve been at it longer in the U.S. and interestingly enough, our Code is moving more closely toward Europe’s and vice versa,” Poulin is quick to note.

In terms of specifics, Delgadillo says that in 2010 the TMA added affiliates in Spain and Italy and anticipates Ireland will likely follow by the end of the year. Other European countries in process of forming TMA affiliates include Romania and Turkey. “We’re also seeing some good activity in Asia and we’ve got affiliates in Taiwan. We’re planning – and it’s tentative right now – for our first Asia Pacific Conference in 2011. We’re looking potentially to hold it in Taipei but we’re in the very early stages of discussion although we have the support of our Japanese and Australian affiliates to help us organize that event.”

Looking Forward: Industry and Association Keep in Tune

We asked Poulin to share here thoughts, both as TMA president and as an industry practitioner, as to what she feels is first and foremost on the collective mind of turnaround professionals. She explains, “Well, I can tell you that regardless of the cycles, practitioners always worry about where the next deal is coming from. And if you’re in a transaction, you find yourself worrying about what your client is worrying about. Also, I think folks in the profession might be concerned that the industry is changing a bit because of the changes to the Bankruptcy Code … some of the things that used to be in our ‘bag of tricks’ have been modified a good deal. And of course, there’s doing good by your client. We’re always thinking about how to best advise our clients given those changes – how to navigate given those constraints.”

But, Poulin contends, active participation with the TMA makes a difference in facing these concerns – particularly when it comes to the association’s networking opportunities. She says, “This industry is organized around reputation and it’s valuable to be able to interact with professionals with whom you haven’t gotten to work with in a case. It’s a good way to get to know your competitors and potential referral sources and to get a sense as to what their professional judgment is and to gain a certain level of comfort with them.”

With that in mind, Delgadillo says the association will continue developing networking opportunities going forward. “Of course we’ll continue with our commitment to education. And from what we hear from our members, education and networking are very closely rated in terms of member benefits. But we think the edge goes to networking and we’ll spend some time looking at new ways we can provide those opportunities to our membership beyond what we’ve provided in the past. Part of that will come with expansion in social media.

And this year, we set up the Capital Markets Forum at our annual Distressed Investing Conference in Las Vegas. We’ll repeat that in 2011 to give our members a chance to meet others who might have a common interest in particular transactions. We think that’s another value point we can bring to TMA members.”

Looking internally, Delgadillo notes the TMA itself has undergone some restructuring to bring a new approach to the way the association handles everything from membership marketing to general branding and public relations. “We’re really making a concerted effort to bring a consistent branding and message strategy to our members as well as to the outside world about the corporate renewal industry, about what the TMA can do and the role the association plays in the industry. We think this is going to deliver enhanced value to our members because the more we can get the word out on a regular basis about the value that our members bring to the corporate world, we think we’ll generate some additional business for them.”

Summing up, Delgadillo adds, “It’s a fairly complex organization as it turns out and we ended with a little over 9,600 members … so it’s a good, strong and vital association.”

Stuart P. Papavassiliou is a former senior editor of ABF Journal.