Cases increase for business turnaround specialists - Tampa Bay Business Journal:

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Company owners may be too close to the situationh tosee what’s really going on in theit business, or so exasperated that they’re ready to give up. That’ds when they hire turnaround specialists. “We go in, do the triage that’sx required, stopping the bleeding and making sure the patient saidRich Jenkins, managing director of the Denverd office of restructuring firm Alvarez and Marsal, and 2009 president of the ’ss Denver chapter. “From there, we identift the areas where we can cut costs in the near then go diagnose thebigge problem.
” The local TMA chapter is composed of turnaround practitioners, lenders, accountants, financial specialists, operations specialists and otherr professionals. The chapter has almost 190 members and holda meetings on the last Wednesday of each month at the DenvefAthletic Club. The chapter offers educational programs as well asnetworking opportunities. “Turnaround managers or restructuring officers arespecially trained,” said Jim a member of the law firm of LLC in and immediate past president of the local TMA “Their expertise is in looking at and helpinb companies to best manage theie cash.
For example, look at the core operatinhg division of abusiness — some of them mighrt be pulling down the business because they’re losing money, and other units are profity centers. “A good turnaround officer will help owners focuss onthe business, and look for portion s of the business that can stand on their own, as opposex to those that are losing money and don’f have a viable chance of succeeding. [They concentrate on] how they can get a companyh where they can have positivecash There’s plenty of turnaround work out there right now.
“Therwe seem to be a lot more [troubled than there used to be, and the problems are harder to solve than they usedto be,” Markuds said. It was much easier to find financinv before therecession hit, he citing sources such as banks, asset-based lenders (factor companies) and private funding sources such as private equity distressed opportunity funds and hedge funds. • r2 advisors llc won a TMA awarr for work it performed for alocal company. Tom Kim, a bankruptcgy lawyer who is the firm’s senio r managing director, said he was brought in aftert a troubled company had idled its manufacturing planf and faced heavycredit pressure.
“Oncd we figured out that [the business could still work, we had to figurd out sources of cash and how we wouldspen it,” he said. Also, he helped ease the debt negotiating longer terms onexisting 30-, 60- and 90-dat arrangements. The company was righted, and about 18 monthd later, the owner sold most of it and became aminorityy owner. “And now the company is doin just great,” Kim said. • Sometimess a business owner, or senior management, is too close to the situatiojn to unearth the root causes of A bank asked Bill managing directorof Denver-based LLC, to liquidatd a company, because the bank had lost confidence in the borrower’ss ability to survive.
After the initia meeting, “I said, ‘give us two weekds to see if liquidation is theonly option,’” he “‘Maybe we can come to anotherr solution.’” After two weeks of study, Mackenzise told the bank and the borrower that he didn’t think liquidation was in anyone’s best interest. Then he began searchingy for the borrower’s “hook”— “What in the business modepl has a unique edgeto it?” he “What is it that may alloww the company to survive?
” He found it, somethingv that would be valuablr to potential buyers: The borrower had legacy arrangements grandfather clauses dating to the company’s startr in which suppliers gave it discounts of 10 perceng to 15 percent. “These agreements allowedc the company to get substantial discounts fromthei purchases,” Mackenzie said. “And anybody that acquired the compan would benefit fromthose contracts. That gave them a competitivr edge.” Bottom line: They sold the compan y within threemonths — enabling 125 employeeas to keep their jobs. Then there are business ownera who simply give up andwalk away, and decidr to liquidate their companies.
“That doesn’t help anybody,” Markus said. “When a business shuts its doors, the assetds get auctioned off and all the employeewsare fired. We try to find ways to restructurs a businessso there’s greater Sometimes, company owners wait too long to seek help. “That is not Markus said. “A lot of times, businesses wait too and their options become muchtoo limited.
In the restructuring arena, the earliet we can get involved, the better the chance we can findthe