The Future of Our Industry
companies have joined traditional
financial institutions as sources of capital
for distressed businesses. Business
activity is driven largely by the lending
marketplace. Although they have
input, TMA members don’t control
how capital structures are defined.
It appears that distressed inventory
is rebuilding. When and how will the
underperformers become visible to
the TMA membership? Banks have
fewer workout professionals, which has
altered the traditional referral stream.
In addition, there is a knowledge gap
in how to handle loan workouts. While
lenders retain a few senior people who
know how to conduct loan workouts,
younger professionals don’t possess
that knowledge. If the market shifts, a
great deal of education will be needed.
Turnaround Firms Provide a Wider
Range of Services. Large firms are doing
more nontraditional “turnaround” work
and are leveraging their turnaround
perspective in other ways. Small firms
and single-shingle practitioners are
expanding their efforts in the middle
and lower-middle markets. All of this has
resulted in restructuring and turnaround
activities being conducted earlier in
the business life cycle. Few classic
reorganizations are being undertaken.
Nothing in the current economic
environment suggests that continuing
consolidation and limited firm growth
are likely to change in the near future.
To grow, TMA must attract professionals
from new segments and offer increased
value to non-members in the industry.
Law Firms Are Under Continued
Pressure. The number of smaller
companies filing Chapter 11 is
dropping, and larger case filings remain
relatively flat. No near-term change
is expected in those trends. Fewer
traditional restructuring professionals
are needed in the near term. Firms are
looking for deal-oriented, rather than
Cases are “partner heavy” and use fewer
associates. Out-of-court remedies,
Bankruptcy Code Section 363 sales,
and prepackaged deals have increased.
When a case does go to court, time
frames are shorter, assets are fully
encumbered, and fewer individuals
are needed to work the case.
Internationalization Is a Disruption. All
sectors of TMA’s membership are being
impacted by events outside of North
America, and this will continue. TMA is
uniquely positioned to bring together
members globally to educate one another
on how to leverage this disruption.
Young Professionals Seek Guidance.
TMA’s NextGen program must continue
to serve the needs of this important
member segment. Finding a way to
increase continuing education credits
available from NextGen programing could
enhance the already strong networking
value associated with these events.
Compensation Schemes May Need
to Evolve. Both law firms and advisory
firms are reviewing fee structures. TMA
should consider leading a dialogue
on moving compensation away
from hourly based structures. Topics
could include success- and risk-based fees and bonuses for speed.
These are interesting and challenging
times. TMA members are uniquely
equipped not only to respond to a shifting
environment but to thrive in it as well.
TMA can help by raising the profile of
the profession and highlighting the
talent and expertise in its membership.
As my third year as TMA’s CEO draws
to a close, I have never been more
passionate, enthusiastic, energized, and
optimistic about TMA and the future
for its members. I wish you a safe and
happy holiday season and look forward
to seeing you at TMA events in 2015! J
Gregory J. Fine, CAE
TMA Global Chief Executive Officer
This month’s collection of JCR articles offers insight into how the turnaround and
restructuring industry continues
to evolve. As a multidisciplined
membership organization, it is
incumbent on TMA to facilitate
conversations about the industry’s
future to position the organization
to provide value by addressing and
responding to member needs.
In February, TMA Global President
Kevin Carey created the Futures Task
Force to look at key areas critical for
TMA’s long-term success. The task
force concluded that TMA should be
positioned as one of four core pillars
of industry professionals, along with
the American Bankruptcy Association
(ABI), Commercial Finance Association
(CFA), and Association for Corporate
Growth (ACG). Each organization plays a
unique role. TMA should be positioned
as the financial advisory organization
for the industry by leveraging its
unique strengths, including its chapter
structure and international platform.
Key trends impacting the turnaround
and restructuring industry identified
during Task Force discussions
included the following:
Capital Markets Drive the Industry.
There are fewer bankruptcies and
more refinancings in the current
environment, and private equity groups,
hedge funds, and private finance