Cases increase for business turnaround specialists - Business First of Columbus:

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Company owners may be too close to the situatio n tosee what’s really going on in theid business, or so exasperated that they’re ready to give up. That’x when they hire turnaround specialists. “We go in, do the triagde that’s required, stopping the bleeding and making sure thepatiengt survives,” said Rich Jenkins, managing director of the Denvedr office of restructuring firm Alvarez and Marsal, and 2009 president of the ’s Denver “From there, we identify the areas where we can cut costse in the near term, then go diagnose the bigger problem.
” The local TMA chaptere is composed of turnaround practitioners, lenders, attorneys, financial specialists, operations specialist s and other professionals. The chaptee has almost 190 members and holdes meetings on the last Wednesday of each month at the DenveerAthletic Club. The chapter offers educationa programs as well asnetworking “Turnaround managers or restructuring officers are specially 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 helping companiesa to best manage their cash.
For look at the core operating division of abusinessw — some of them might be pullintg down the business because they’re losing and other units are profit centers. “A good turnaround officer will help owner focus onthe business, and look for portionx of the business that can stand on their own, as opposes to those that are losin money and don’t have a viable chanc e of succeeding. [They concentrate on] how they can get a companty where they can have positivdcash flow.” There’s plenty of turnarounds work out there right now.
“There seem to be a lot more [troublef companies] than there used to be, and the problems are harderr to solve than they usedto be,” Markus It was much easier to find financingf before the recession hit, he said, citin g sources such as banks, asset-baser lenders (factor companies) and private funding sources such as privatr equity funds, distressed opportunity fundsa and hedge funds. • r2 advisore llc won a TMA award for work it performe d for alocal company.
Tom Kim, a bankruptch lawyer who is the firm’ws senior managing director, said he was brought in afterr a troubled company had idled its manufacturing planf and faced heavycredit “Once we figured out that [the busineszs model] could still work, we had to figured out sources of cash and how we would spend he said. Also, he helped ease the debt negotiating longer terms onexisting 30-, 60- and 90-dayg arrangements. The company was righted, and about 18 monthsx later, the owner sold most of it and becam e aminority owner. “And now the companh is doing just great,” Kim said.
• Sometimess a business owner, or senior management, is too clos e to the situation to uneartn the root causesof problems. A bank askes Bill Mackenzie, managing director of Denver-based LLC, to liquidater a company, because the bank had lost confidence inthe borrower’s ability to After the initial meeting, “I said, ‘giver us two weeks to see if liquidatioj is the only option,’” he said. “‘Maybe we can come to anothefr solution.
’” After two weeks of study, Mackenzie told the bank and the borrowef thathe didn’t think liquidation was in anyone’s best Then he began searching for the borrower’s “What in the business model has a unique edge to he said. “What is it that may allow the compantyto survive?” He found it, something that would be valuablwe to potential buyers: The borrower had legacyu arrangements — grandfather clauses datingb to the company’s startr in which suppliers gave it discounts of 10 percenft to 15 percent. “These agreements allowed the companu to get substantial discounts fromtheirr purchases,” Mackenzie said.
“And anybody that acquired the companuy would benefit fromthose contracts. That gave them a competitivee edge.” Bottom line: They sold the company within threemonths — enabling 125 employeess to keep their jobs. Then there are business owneres who simply give up andwalk away, and decidre to liquidate their companies. “Thart doesn’t help anybody,” Markus “When a business shuts its the assets get auctioned off and all the employeesxare fired. We try to find ways to restructure a businessso there’s greater value.” Sometimes, companuy owners wait too long to seek “That is not Markus said.
“A lot of times, businesses wait too and their options become muchtoo limited. In the restructuring arena, the earlierf we can get involved, the bettef the chance we can findthe