Dedicated to Corporate Renewal TURNAROUND MANAGEMENT ASSOCIATION ©2012 Turnaround Management Association
Dedicated to Corporate Renewal
TURNAROUND MANAGEMENT ASSOCIATION
©2012 Turnaround Management Association
CONFERENCE OVERVIEW
Chicago/Midwest Upper Midwest Missouri Detroit Ohio
PARTICIPATING CHAPTERS
2007 Marriott ~ Oak Brook Hills, Illinois 2008 Marriott ~ Oak Brook Hills, Illinois 2009 Marriott ~ Lincolnshire, Illinois 2010 Greektown Casino ~ Detroit, Michigan 2011 Radisson ~ Minneapolis, Minnesota 2012 Hyatt ~ Chicago, Illinois
WHERE WE’VE BEEN
2007 1st Annual MidAmerica Conference 2008 Winning in Turbulent Times 2009 Riding Out the Storm 2010 Betting on a Recovery 2011 Finding Certainty in Uncertain Times 2012 Creating Opportunities in a Slow Growth Period
WHAT WE’VE TALKED ABOUT
WHERE DO WE STAND?
WHERE DO WE STAND ONE YEAR LATER?
August 1, 2011 August 1, 2012 ChangeDow Jones Industrial Average 12,132.49 12,971.06 6.9%NASDAQ Financial 100 2,082.35 2,099.48 0.8%3-month LIBOR 0.26% 0.44% 69.2%10-year Treasury 2.77% 1.56% (43.7%)Consumer Confidence Index 59.5 65.4 9.9%Home Price Index 142.97 142.21 (0.5%)Oil Price ($ per barrel) 94.98 88.99 (6.3%)Inflation (CPI) 3.80% 1.41% (62.9%)
ANY TRENDS WITHIN THE PAST MONTH?
August 1, 2012 September 7, 2012 ChangeDow Jones Industrial Average 12,971.06 13,306.64 2.6%NASDAQ Financial 100 2,099.48 2,233.47 6.4%3-month LIBOR 0.44% 0.41% (6.8%)10-year Treasury 1.56% 1.67% 7.1%Consumer Confidence Index 65.40 60.60 (7.3%)Oil Price ($ per barrel) 88.99 96.40 8.3%
QUARTERLY DOMESTIC M&A ACTIVITY
0
500
1,000
1,500
2,000
2,500
$-
$50
$100
$150
$200
$250
$300
Q12008
Q22008
Q32008
Q42008
Q12009
Q22009
Q32009
Q42009
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Transaction Value ($ bil) Number of Transactions
Source: Thomson Financial
ANNUAL BUSINESS CHAPTER 11 FILINGS BY CIRCUIT
Source: Administrative Office of the U.S. Court, reflects business chapter 11 filings for twelve month period ending June 30th
-
500
1,000
1,500
2,000
2,500
2007 2008 2009 2010 2011 20122nd Circuit 3rd Circuit 6th Circuit 7th Circuit 8th Circuit
BANKRUPTCY SALES HAVE SLOWED
64
81 78 83
114
166
185
162 163
147
178
109
129
159
128 123
99 113
0
20
40
60
80
100
120
140
160
180
200
Number of Transactions (count)
Source: S&P CapitalIQ
PAYMENT DEFAULTS CONTINUE TO REMAIN AT LOW LEVELS
1.2% 1.3% 1.6%
4.1%
5.1%
9.8%
12.8%
4.7%
1.2%
3.4%
0.8% 0.5%
4.7%
10.7%
1.1% 1.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Edward I. Altman and Brenda J. Kuehne, “Defaults and Returns in the High-Yield Bond Market: First Half 2012 Review”, July 30, 2012
U.S. BANK FAILURES HAVE SLOWED
Year No. of Failed Banks
Total Assets of Failed Banks
Total Deposits of Failed Banks
2007 3 $2,614,928,000 $2,424,187,0002008 25 $371,945,480,000 $234,321,715,0002009 140 $169,709,160,000 $137,783,121,0002010 157 $92,084,988,000 $78,290,185,0002011 92 $34,922,997,000 $31,071,862,0002012 40 $8,639,694,000 $8,231,282,000Total 457 $679,917,247,000 $492,122,352,000
Note: 2012 data is for the period January 1 – August 3, 2012 Source: FDIC
YESTERDAY’S HEADLINES TO THE MARC’S PANELS
Yesterday’s Headlines Peregrine Financial Group Peregrine Financial Group filed for bankruptcy on July 10, 2012
Sentinel Management Group Inc. Two former executives were indicted for allegedly defrauding customers out of more
than $500 million before the futures brokerage went bankrupt in 2007
Interest Rate Manipulation Recently, the oversight panel of the House Financial Services Committee asked the
New York Fed to detail its correspondence with employees from the banks that help set the London interbank offered rate (LIBOR), which is at the center of an alleged multiyear rate-rigging scheme
Today’s Panel Panel 1A: When the Tide Stays Out: Fraud Trends in Slow-Growth Times
FRAUD
Yesterday’s Headlines Consolidation of small banks on the rise The Washington Post recently reported that a growing number of small and medium
sized banks are merging
Fitch: Several companies restructured under chapter 11 remain at risk of another default US Airways Group Inc. and Great Atlantic & Pacific Tea Co. top a list of companies
that restructured under chapter 11 but remain at risk of another default in the future
Return of private-equity buyouts According to a recent article in the Wall Street Journal, private-equity buyouts are
back but with a twist
Today’s Panel Panel 1B: Capital Markets Update
CAPITAL MARKETS
Yesterday’s Headlines TOUSA Ruling In May 2012, a three-judge panel of the U.S. Court of Appeals for the 11th Circuit said that a
bankruptcy judge did not “clearly err” when he ruled in favor of Tousa’s unsecured Creditors, reversing a district court ruling
RadLax Ruling The U.S. Supreme Court ruled that a secured creditor cannot be denied the right to credit-bid
involving the sale of property or other assets as part of a bankruptcy reorganization plan
Stern v. Marshall Ruling One year later, bankruptcy courts and practitioners continue to struggle with the implications of
the decision on claw back claims and counter claims
Today’s Panel
Panel 2A: TOUSA, RadLAX, and more - The Impact of Recent Case Law on Restructuring Professionals
BANKRUPTCY RULINGS
Yesterday’s Headlines Bankruptcies approaching all-time low Consolidation of restructuring practices, reductions in force Increase in prepackaged/prearranged bankruptcy filings Increase in non-bankruptcy advisory services Increase in fraudulent conveyance litigation Continuation of amend and extend by lenders
Today’s Panel Panel 2B: Lessons From the Turnaround Trenches
CORPORATE RENEWAL INDUSTRY DEVELOPMENTS
Yesterday’s Headlines European Economic Outlook
Recently, George Soros issued a plea to the German government to lead the Eurozone out of recession by boosting growth, creating a joint fiscal authority and guaranteeing common bonds or leave the currency union entirely
Outlook for Commodities In August 2012, energy and precious metals prices increased by 7.8% and 2.8% respectively while
non-energy prices remained flat Knight Capital Group reaches rescue deal with investor group
The Knight Capital Group recently reached a deal to secure a financial lifeline from an investor group that included TD Ameritrade and the Blackstone Group, capping its efforts to stay alive
The 2012 Presidential Election According to a USA Today poll, when asked how much impact the person living in the White House in
2013 will have on the overall economy, 48% in the survey answered, “a great deal” or “a lot”
Tonight’s Keynote Speaker David B. Rusate, Managing Director of Foreign Exchange and Commodity Risk Management, GE Capital
GLOBAL AND DOMESTIC ECONOMIC ISSUES
Yesterday’s Headlines SEC recommends municipal security reform amid municipal bankruptcies In a recently released report, the SEC called for structural improvements to the $3.7
trillion municipal securities market amid a recent uptick in city bankruptcies
The impact of unions on municipalities Chicago Teachers Union went on strike on September 10, 2012
Pension Debt Overwhelms Bankrupt San Bernardino, California San Bernardino, the third California city to seek bankruptcy protection since June, is
saddled with huge pension debt
Tomorrow’s Keynote Speaker Richard M. Daley, Former Mayor of Chicago
FINANCIAL DIFFICULTIES FACING MUNICIPALITIES
Yesterday’s Headlines Regulators say loan quality improving According to a review by the Federal Reserve and two other regulators, the credit quality
of large loan commitments owned by financial institutions regulated in the U.S. improved in 2012 for the third consecutive year
Amend and Extend Continues
Are banks finally strong enough to absorb the losses that they’re going to take relating to these loans?
Is the Credit Market “Red Hot” In recent months, private equity owned companies with the lowest corporate ratings have
been successful in refinancing maturing debt
Tomorrow’s Closing Panel Views from Inside the Special Asset and Workout Groups of Commercial Banks
WHERE ARE THE REFERRALS FROM THE FINANCIAL INSTITUTIONS?
CONFERENCE AGENDA
1:30 p.m. Short Break to re-arrange this room
1:45 p.m. 2 Concurrent Panels (4 total, pick 2) with coffee break in between
5:00 p.m. Opening reception (Grand Ballroom, 2nd Floor)
6:00 p.m. Dinner with keynote speaker, David Rusate
8:30 p.m. Nightcap Reception (Caliterra Restaurant)
CONFERENCE AGENDA Thursday, September 13
7:30 a.m. Breakfast Buffet (Grand Ballroom, 2nd Floor)
8:30 a.m. Keynote Speaker, Former Mayor of Chicago, Richard Daley
9:30 a.m. Coffee Break
9:50 a.m. Closing Panel and Raffle Prizes (must be present to win!)
CONFERENCE AGENDA Friday, September 14
SPONSORSHIP THANKS
PLATINUM SPONSOR
PLATINUM SPONSOR
PLATINUM SPONSOR
PLATINUM SPONSOR
Amherst Partners, LLC Associated Commercial Finance, Inc. Bank of America Merrill Lynch Citizens Bank Business Finance First Midwest Bank Asset Based Lending FirstMerit Bank Business Credit Getzler Henrich & Associates, LLC HYPERAMS, LLC
GOLD SPONSORS
Maynards Industries Inc. Mesirow Financial Consulting, LLC Neal Gerber & Eisenberg LLP NRC Realty & Capital Advisors, LLC Schafer and Weiner, PLLC Taft Stettinius & Hollister LLP Tiger Group Wipfli Turnaround and Restructuring Services
GOLD SPONSORS (CONTINUED)
Opening Reception Gould & Ratner LLP Dinner Chicago Capital Holdings LLC Hilco Appraisal Winston & Strawn LLP Nightcap Reception AccuVal Associates, Incorporated Barron Business Consulting Breakfast Deloitte CRG Varnum
EVENT SPONSORS
Coffee Breaks Golan & Christie LLP Shaw Gussis Fishman Glantz Wolfson & Towbin LLC Raffle Chicago Capital Holdings LLC Marsh & McLennan Companies North Mill Capital Tuesday Morning Acquisitions Group Willow Tree Consulting Group
EVENT SPONSORS (CONTINUED)
2012 PLANNING COMMITTEE
Scott Eisenberg, Amherst Partners Rob Folland, Thompson Hine Tom Goldblatt, Monomoy Capital Partners Harold Israel, Kaye Scholer Jim Kelly, First Business Capital Corp Brian Klein, Maslon Edelman Borman & Brand Bob Koester, MSI Financial Jonathan Martin, Amherst Partners Robert Michaels, Robinson Curley & Clayton
2012 PLANNING COMMITTEE
Jim Nichols, Eide Bailly Michael O’Neil, Taft Stettinius & Hollister Phil Ostroski, Citizens Bank Business Finance John Ratelle, Marsh & McLennan Companies Elizabeth Richert, Coleman Law Firm Joel Schneider, Hilco Real Estate Craig Siiro, Integrated Consulting Services Barbara Yong, Golan & Christie
2012 PLANNING COMMITTEE (CONTINUED)
Chris Glatz Sue Fischer
And the great support from all the other chapter administrators who helped promote the MARC locally in the geographic regions!
CONFERENCE ADMINISTRATORS
BE A WINNER!
Great Raffle Prizes*… Apple IPAD 2
$300 Apple Store Gift Card
$300 Best Buy Gift Card
Portable Digital TV *Drawing will take place Friday at the closing panel session
STAY FOR THE ENTIRE CONFERENCE AND WIN!
CONFERENCE REMINDERS
Break After the First Panels ~ St. Claire Meeting Room
Continuing Education Credits Available
Handout Materials Online
Evaluation Forms
Tweet About Us Throughout the MARC!
#marc2012
HOUSEKEEPING ITEMS
Dedicated to Corporate Renewal
HAVE A GREAT CONFERENCE!
©2012 Turnaround Management Association