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

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Company owners may be too closde to the situation tosee what’s reallh going on in their business, or so exasperated that they’r ready to give up. That’s when they hire turnaround specialists. “Wd go in, do the triages that’s required, stopping the bleeding and making sure thepatienr survives,” said Rich Jenkins, managing director of the Denver officde of restructuring firm Alvarez and Marsal, and 2009 president of the ’sd Denver chapter. “From there, we identify the area where we can cut costs in the near then go diagnose thebigger problem.
” The local TMA chaptee is composed of turnaround practitioners, lenders, attorneys, accountants, financiall specialists, operations specialists and other professionals. The chapter has almosft 190 members and holds meetings on the last Wednesdayu of each month at the DenverAthletifc Club. The chapter offere educational programs as well asnetworking opportunities. “Turnarounc managers or restructuring officers are specially saidJim Markus, a membef of the law firm of LLC in and immediate past president of the local TMA chapter.
“Their expertise is in looking at and helpintg companies to best manage their For example, look at the core operating division of a businesds — some of them might be pulling down the business because they’re losing and other units are profit centers. “A good turnaround officedr will help owners focus onthe business, and look for portion of the business that can stand on their own, as opposefd to those that are losing mone and don’t have a viable chance of [They concentrate on] how they can get a companuy where they can have positiv e cash flow.” There’s plenty of turnaround work out thers right now.
“There seem to be a lot more [trouble companies] than there used to be, and the problems are harder to solve than they usedto be,” Markux said. It was much easier to find financing beforew therecession hit, he said, citinv sources such as banks, asset-basedd lenders (factor companies) and private funding sourcee such as private equity distressed opportunity funds and hedge funds. r2 advisors llc won a TMA awarrd for work it performed for alocal company. Tom Kim, a bankruptcy lawyer who is the firm’e senior managing director, said he was broughty in after a troubled company had idled its manufacturing plant and facef heavycredit pressure.
“Oncde we figured out that [the businesw model] could still work, we had to figured out sources of cash and how we wouldspenx it,” he said. Also, he helped ease the debt negotiating longer terms onexistin 30-, 60- and 90-daty arrangements. The company was righted, and abouy 18 months later, the owner sold most of it and becamw aminority owner. “And now the companyu is doing just great,” Kim said.
• Sometimesd a business owner, or senior is too close to the situation to unearth the root causes of A bank askedBill Mackenzie, managing director of Denver-based LLC, to liquidate a company, because the bank had lost confidenc e in the borrower’s ability to survive. Aftetr the initial meeting, “I said, ‘give us two weekes to see if liquidation is the only he said. “‘Maybe we can come to another solution.’” After two weeks of study, Mackenzie told the bank and the borrowert thathe didn’t think liquidation was in anyone’sx best interest.
Then he began searching for the borrower’s “hook”— “What in the busines s model has a unique edgeto it?” he “What is it that may allow the compangy to survive?” He found it, somethinf that would be valuable to potential buyers: The borrower had legacy arrangements — grandfather clauses datint to the company’s start in whicy suppliers gave it discounts of 10 percent to 15 percent. “These agreements allowee the company to get substantial discounts fromthei purchases,” Mackenzie said. “And anybodyu that acquired the company would benefitr fromthose contracts. That gave them a competitiv e edge.
” Bottom line: They sold the company withib threemonths — enabling 125 employees to keep their jobs. Then there are business ownerse who simply give up and walk and decide to liquidatdtheir companies. “That doesn’t help anybody,” Markus said. “When a businesws shuts its doors, the assets get auctioned off and all the employees are fired. We try to find ways to restructuree a businessso there’se greater value.” Sometimes, compan owners wait too long to seek help. “That is not Markus said. “A lot of times, businessez wait too long, and their options becomee muchtoo limited.
In the restructurin g arena, the earlier we can get the better the chance we can findthe