July 2007 TMA Detroit Volume 1, Issue 8 Newsletter TMA Detroit · 2007-08-15 · July 2007 Corporate Sponsors 2 West Michigan Press Release 3 Featured Turnaround Articles 4, 9 Getting

In May of this year, the West Michigan Chapter of the TMA was officially launched when it held its inaugural event - a panel discussion on automotive distress and the resulting impact on the West Michigan economy. The event attracted over 100 attendees. The West Michigan Chapter is off to a great start and has already obtained eight corporate sponsors. We are also pleased to announce that the Detroit TMA Chapter has been approved by the National Association of State Boards of Accountancy (NASBA) as a registered sponsor on the National Registry of CPE Sponsors. As a result, both CPA’s and CTP’s will be eligible to earn CPE credits by attending Detroit TMA Chapter events featuring educational content that qualifies under NASBA standards. So that our membership can maximize

this benefit, the Board will do everything it can to ensure that the educational content in our pro-grams meets the NASBA standards. Special thanks to Russ Long for his extensive efforts in work-ing with the NASBA to achieve this important designation. Over the last several years, the Detroit TMA Chapter has gained a tremendous amount of momen-tum on both a local and national level. We were honored by TMA International as the 2005 Most Improved Chapter of the Year and, just one year later, recognized as the 2006 TMA Chapter of the Year. We currently have 290 members, an increase of approximately 13% compared to the prior year, partially attributable to the West Michigan Chapter. We are the seventh largest chapter out of 45 chapters worldwide and were recently the first major chapter in the U.S. to achieve our 2007 membership goal. We are also proud to announce that the Detroit Chapter, through coordination with the ACTP, will again host a three-day Certified Turnaround Professional certification program from September 27th -29th at LaSalle Bank. Early registration figures indicate that the event will be well attended, again demonstrating the Detroit Chapter’s commitment to the CTP accreditation. There are currently 39 members of the Detroit Chapter who have obtained their CTP designation with another 3 CTP designates pending. Finally, I hope everyone enjoys the remainder of the summer and I look forward to seeing you at our Fall Kickoff networking event in September. Sincerely,

Michael Hausman TMA Detroit Chapter President

FROM THE CHAPTER PRESIDENT

TMA Detroit

T U R N A R O U N D M A N A G E M E N T A S S O C I A T I O N

Volume 1, Issue 8

July 2007

Corporate Sponsors 2

West Michigan Press Release

3

Featured Turnaround Articles

4, 9

Getting to Know You 10

Event Highlights 13

Members in the News 15

New Members 16

Announcements 17

New Member Application

21

Save the Date 14

Inside this issue:

• September—Fall Kickoff Details to follow

Upcoming Events:

TMA Detroit Newsletter

2

Turnaround Management Associa tio n

SILVER SPONSORS

6001 N. Adams Rd., Ste. 205 Bloomfield Hills, MI 48304

Phone: 248-593-4810 Fax: 248-593-6108 Email: [email protected] www.turnaround.org



Many Thanks to our 2006-2007 Sponsors

Barefoot, Cramer & Associates LLC

Operating Consultants

GOLD SPONSORS

Michigan’s Law Firm



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THE WEST MICHIGAN CHAPTER IS UP AND RUNNING NEWS RELEASE

WEST MICHIGAN TMA ORGANIZATION NAMES BOARD GRAND RAPIDS, Mich., June 30, 2007 – The newly formed West Michigan Organization of the Turnaround

Management Association has appointed the following board members:

• President: David Distel, O'Keefe & Associates Consulting, LLC

• Vice President: Michael McElwee, Varnum Riddering Schmidt Howlett

• Treasurer: John Pollock, LaSalle Business Credit, LLC

• Secretary: Robert Wolford, Miller Johnson

Director of Membership Development: John Weykamp, Crowe Chizek

The chapter held its inaugural event - a panel discussion on the automotive industry in West Michigan - in

May and attracted more than 100 professionals.

“Our collective experience with corporate renewal is in demand now more than ever as once-stable companies

struggle to maintain and restore profitability in the current climate of economic volatility,” Board President

David Distel said. “We are proud to be affiliated with the TMA Detroit Chapter, which was recognized for

exceptional achievement with the 2006 TMA Chapter of the Year Award.”

The Turnaround Management Association (www.turnaround.org) is the only international non-profit associa-

tion dedicated to corporate renewal and turnaround management. With international headquarters in Chicago,

TMA has 7,700 members in 40 regional chapters who comprise a professional community of turnaround prac-

titioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive re-

cruiters and consultants. Its Certified Turnaround Professional (CTP) program recognizes professional excel-

lence and provides an objective measure of expertise related to workouts, restructurings and corporate renewal.



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Financial Experts Are Vital Legal Resource

VALUATION EXPERTS ADD STRATEGIC SUPPORT TO LITIGATION TEAM By Susan Koss, ABV, CPA, CVA

Polished, high-impact presentations are never solo acts. Behind a star in the spotlight at center stage

are many unseen supporters, from managers to musicians, directors to designers.

Choreographing strategy to present or defend civil litigation also benefits from teamwork. Successful

attorneys rely on experienced specialists for research, analysis, asset valuations, damage assessments,

economic projections and other technical interpretations.

Soon after accepting a case that will head into complex or unfamiliar territory, these litigators from

practices of all sizes enlist consultants to advise on discovery requests, interrogatories, deposition ques-

tions and other tactics. Clients obtain a competitive edge when professionals, such as certified public

accountants with an understanding of the economics underlying the law, add breadth and depth to the

team.

Financial valuation experts are among litigation support consultants who help attorneys leverage

their own skills. By becoming an ingredient of the plaintiff’s or defendant’s legal team, a consultant can

help formulate a damage theory, conduct research, evaluate strengths and drawbacks of the opposing

party’s position, prepare a rebuttal report to challenge an opposing expert’s interpretation and present

conclusions based on accepted industry standards. Experts retained as testifying witnesses, by contrast,

maintain an ostensibly objective role and face challenges under oath.

Article continued on page 5...

FEATURED TURNAROUND ARTICLE



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...continued from page 4


Productive partnership At their strongest, alliances with litigation support consulting firms begin not long after initial client

conferences and preliminary review. These experts do much more than crunch numbers. Their case develop-

ment guidance sharpens document requests, spotlights strengths and weaknesses, refines interrogatories and

shapes responses to technical or financial questions from opposing counsel. Belated involvement limits the

consultant’s effectiveness if all potentially relevant records were not requested during the discovery period.

A knowledgeable ally at the table also adds authoritative insights and judgments that help frame realistic

damage claims, challenges of an opposing expert’s viewpoint and settlement offer reviews. He or she also can

interpret documents to reconstruct business activity, help prepare testimony by the other witnesses or experts

in the case, and suggest a specialized witness, if needed.

The result is a solid foundation for mediation or arbitration, where an overwhelming majority of civil cases

are resolved.

A wrongful termination case against a Southeast Michigan municipality illustrates how a financial analyst

provides determinative information. An employee claimed her discharge constituted age discrimination. In an

analysis commissioned by her counsel, a labor economist calculated that she deserved $1.5 million in lost

wages and benefits because she would be unable to find a comparable position locally before reaching retire-

ment age. Labor market data in our rebuttal report challenged the plaintiff’s job search methods by showing

she was qualified for openings at slightly reduced wages. Based on the average potential earnings we demon-

strated, the lawsuit was settled for under $300,000 -- one-fifth of the economic damages originally claimed

based on the underlying economic potential of the company.

Similarly, our detailed examination of a Tier I automotive engineering firm’s tangible and intangible assets,

revenue stream, market share, industry trends and other factors helped secure a pretrial settlement for a share-

holder who challenged a stock-buyback offer that we determined was unjustly low.



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Leveraged strength Valuation experts explore questions and generate information often not on attorneys’ radar. This combined

training and experience creates a powerful team -- a joint task force that sees opportunities, plugs gaps and is

armed with hard facts rather than hunches.

Tactical contributions include helping prove damages with rock-solid figures, backed by bulky binders

showing their factual basis and the process behind each calculation. The consultants’ impact extends to helping

develop lines of questioning for deposition testimony by the other side’s expert, such as why he or she chose a

certain valuation method, actuarial table, mathematical ratio or forecasting formula. Similarly, detailed, thor-

ough analyses can expose an opponent’s vulnerability – perhaps by showing variances from accepted account-

ing standards, declining asset values or likely erosion of earnings due to market changes.

Essentially, the research and analysis provides the groundwork for presenting financial information clearly

and vividly for maximum advantage. The role includes translating complex concepts into jargon-free presenta-

tions by the attorney that a mediator, arbitrator, judge or jurors not familiar with financial mumbo jumbo will

grasp readily.

This attorney-analyst alliance is valuable for cases involving breach of contract, liability, rezoning, business

interference, trademark or patent infringement, intellectual property, licensing violations and bankruptcy.

Value in non-business cases

Beyond the commercial sphere, financial consultants also participate in estate matters and strengthen high-

stakes marital dissolution cases. We helped reduce a physician’s divorce settlement obligation dramatically by

demonstrating that long hours building the small practice were 2.5 times above the professional norm. The

spouse’s attorney had proposed a settlement based on the practice’s revenue, but compelling evidence of a dis-

proportionate workload led to a more equitable division of the couple’s joint property.

Certified valuation analysts serve the full spectrum of legal practitioners – from solo offices to large firms.

Because attorneys generally lack formal accounting expertise and don’t need a full-time specialist in house, a





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The opinions expressed in this article are solely those of the author and do not constitute any opinion on the part of the TMA.

“pay-as-you-go” approach is sensible – just as outside investigators, engineers, land planners and other

consultants are retained when warranted.

Accountants who are valuation analysts should be evaluated on the basis of experience, certifications,

referrals and performance, as with other professionals. Request a case study or redacted copy of an analysis

report. Of course, talk to at least one counselor who received support.

Cost-effective resource

Opening the door to an outside strategist may feel humbling, though turning to trained experts for technical

knowledge is basically another form of research – though much more valuable and effective than the results

from paralegals, books and Lexis-Nexis.

Some attorneys initially have concern that detailed financial scrutiny could undercut a case. The opposite

actually occurs. Knowledge is power, and it’s always safer than assumptions.

Authoritative evidence lets attorneys spot vulnerabilities, anticipate opposing strategies and adapt in light of

new information. It’s better to know early what cards you’re holding and gain a trustworthy sense of the other

side’s hand.

Internally, we step back and perform a similar type of independent “sanity check” by asking an uninvolved

colleague to look closely at calculations and conclusions as a way of assuring they make sense.

When business or personal cases pivot on determining worth and proving it, it pays to let experts “do the

math” – and much more – rather than overlook strategic moves or risk surprises a valuation analyst would

have flagged. Susan Koss, a litigation support specialist at O’Keefe & Associates, is accredited in business valuation by both the AICPA (American Institute of Certified Public Accountants) and NACVA (National Association of Certified Valuation Analysts). O’Keefe & Associates, a financial consulting firm located in Bloomfield Hills, MI, specializes in turnaround consulting, corporate finance, debt restructuring, business valuations, litigation support, creditor and bankruptcy ser-vices, forensic accounting, and due diligence on strategic transactions. Established in 2001, the company also has a location in Grand Rapids, MI. For more information, visit www.okeefeandassociates.com or call 248.593.4810


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Daubert Challenge – Opposing Attorneys Trojan Horse



ADVERTISE WITH TMA DETROIT

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GETTING TO KNOW YOU

Behind the Scenes, Extras We Thought You Might Like to Know About Brian Krasicky:

• Member of TMA since 2004 • Current position and company:

Director, O’Keefe & Associates • Areas of expertise:

Corporate finance, corporate renewal

• Representative clients/matters: Privately held, middle market, later stage companies needing financial turnaround management; industries-real estate, manufacturing, distribution, service and retail

• Last book read “1776” by David McCullough • What would we find you doing when you are not at work:

Youth sport coach and writing a book • Person I'd most like to have lunch with:

My father and Ben Franklin • Most Exciting Adventure:

Starting and running my own company • Top Three Favorite Movies:

Remember the Titans, Good Will Hunting, The Wizard of Oz



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GETTING TO KNOW YOU

Behind the Scenes, Extras We Thought You Might Like to Know About Douglas Bernstein:


Shareholder & Banking, Finance & Creditors’ Rights Practice Group Leader of Plunkett & Cooney

• Areas of expertise:

Commercial litigation, commercial loan restructuring and workouts, commercial loan documentation, creditors’ rights, bankruptcy, bank-ing-related litigation and appeals.

• Representative clients/matters:

• Served as counsel to secured lender in several troubled residential construction and development projects, including obtaining the appointment of a receiver.

• Representation of lender in bankruptcy proceedings to deny debtor the discharge of a $1,500,000 loan.

• Successful restructure on behalf of lender of $28,000,000 loan relationship, resulting in full repayment to client, including reimbursement of all costs and attorneys’ fees.

• Representation of major automotive supplier in defense of $10,000,000 preference and fraudulent conveyance action.

• Served as counsel to lender in numerous matters involving troubled hotels, restaurants, boat manufacturers, automotive suppliers.

• If I was not in my current profession:

I would be running the Unlimited Hydroplane Series or I would be more involved in it.

• Favorite Vacation Destination: Seattle

• Top Three Favorite Music Groups: Bare Naked Ladies, Joe Cocker, Rolling Stones



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GETTING TO KNOW YOU

Behind the Scenes, Extras We Thought You Might Like to Know About Jim Farrell:


First Vice President/Business Development Officer, LaSalle Business Credit

• Areas of Expertise:

Financing senior debt requirements for leveraged acquisitions, re-structurings, and turnarounds. In previous positions, I have been CFO/Controller of Distribution business and a financial institution, financial consultant working on turnaround situations.

• Representative clients/matters:

Primarily privately held, middle market manufacturers, distributors, and service providers

• If I Were Not in This Profession:

I would most likely be a history professor • Last Books Read: Battle in the Teutoberg Forest Rome’s Greatest Defeat The Teutonic Knights, a Military History • Person I'd most like to have lunch with:

Don King • Top three sports/activities:

Football, Golf and Baseball

• Top Three Music Groups: The Who, U2 and Bruce Springsteen



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EVENT HIGHLIGHTS

A mixer in May at Fifth Avenue Billiards in Novi and another successful golf outing at Twin Lakes.

Left to right, Wade Tulk of Maynards, Ken Kuna of University of Detroit Mercy in the background, and Greg Boller of Michigan Commercial Credit—Thanks for the picture!

Enjoying a cold beverage on a hot day, starting left, Sue Berke of Star Financial Resources, Dan Wollschlager of BBK, Jonathan Martin of Amherst Partners, and Steve Gross of McDonald Hopkins.

Weather was a little threatening, but turned out to be a great day. From left to right, Scott Terryn of Chase Business Credit, Mark Nowacki of National City, Tim Tomasko of Great Lakes Business Credit, and Dick Wood of First Business Capital Corp.

The beverage cart was empty after we left this group. From left to right, Jeff Fleury of Stark Regan, Brian Krasicky of O’Keefe & Associates, Andy Helmuth of Charter One Bank, and Brian Hunter of Fenner Melstrom, and Dooling.

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SAVE THE DATE

• September—Fall Kickoff Event • September 20-21st—First Annual TMA MidAmerica Regional Conference at the Oak Brook

Hills Marriott Resort in Oak Brook, Illinois. *Sponsorships Available • October 16th—TMA Annual Convention—Boston, MA

15

MEMBERS IN THE NEWS

Congratulations!

• Jonathan Ball of Jervis B. Webb Co. was named in Crain’s Detroit Business as a CFO Finalist for

strategically restructuring the company which allowed Jervis B. Webb to be debt-free this year. They are expecting revenue this year of $250 million.

• Brad Coulter has joined O’Keefe & Associates as a Director.

• Stephen Gross has been named the Co-Chairman of McDonald Hopkins, PLLC's Business Restructuring Department. He will continue to serve as the Managing Member of its Michigan office.

• Doug Kearney joins Superior Capital Partners as Principal of the firm.

• Jonathan LaBarre has joined O’Keefe & Associates as a Director to head up the corporate finance department.

• TMA member, Janice Murray has formed the firm of Murray Advisors, LLC, specializing in turnaround consulting and debt restructuring. Murray Advisors is located at 200 E. Big Beaver Road in Troy, Michigan 48083. Phone: 248-619-3960.

• O’Keefe & Associates accepted The M&A Advisor’s Middle-Market “Manufacturing: Business to Business Deal of the Year” Award. The transaction was recognized at The M&A Advisor’s Middle-Market Financing Awards dinner held at The Standard Club in Chicago on June 26, 2007.




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Turnaround Management Associa tio n

6001 N. Adams Rd., Ste. 205 Bloomfield Hills, MI 48304

Phone: 248-593-4810 Fax: 248-593-6108 Email: [email protected] www.turnaround.org



NEW MEMBERS

Richard Boman Fifth Third Bank David Dawson Fifth Third Bank James Downes BBK Caroline Fuchs Entrepreneur Growth Capital Todd Hanson Financial Edge Executive Resources Michael Gerbasi The Sager Company Christopher Good Conway MacKenzie & Dunleavy Michael Lattas J Michael Consulting Group Guy Morgan BBK Scott Miedema Miedema Auctioneering & Appraisals, Inc. Dawn Reamer Yazaki North America Inc. Thomas Sarb Miller Johnson Marc Schechter The Anderson Group Ronald Silberstein Maddoz Ungar Silverstein John Simon Foley & Lardner John Wentzel Tech-Tran International Inc. Robert Wolford Miller Johnson Frank Terorero TessConsult Services, LLC Nick Volpe Fifth Third Bank Daniel Yeomans Amicus Management

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Results of 2007-2008 Detroit Chapter TMA Board Elections

Newly Elected Board Member:

Doug Kearney, Conway MacKenzie & Dunleavy

Returning Board Members:

Mike Hausman, Alvarez & Marsal - President Chuck Moore, Conway MacKenzie & Dunleavy (incumbent) - Vice President

Dave Priestley, Plante Moran - Secretary/Treasurer Marc Bakst, Bodman LLP

James Embree, Comerica Bank (incumbent) James Farrell, LaSalle Bank (incumbent)

Ralph Kourtjian, Wells Fargo Business Credit Russ Long, O’Keefe & Associates Scott Terryn, Chase Business Credit




ANNOUNCEMENTS

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2007-2008 Advertising Information

General: The Detroit Chapter’s Newsletter is published four times per year. The current publication months are January, April, July, and October. The Newsletter is mailed to all Detroit Chapter members (over 200) and others on the Detroit Chapter events mailing list (approx. 400). The Newsletter also appears on the Detroit Chapter website (ads will appear in black and white). Each edition of the Newsletter is also mailed to regional members of guest organizations whose members overlap with TMA, including the Association of Insolvency and Restructuring Advisors (AIRA), the Risk Management Association (RMA), the Midwest Business Brokers and Intermediaries (MBBI) , the American Bankruptcy Institute (ABI), and the Association for Corporate Growth (ACG). The deadlines for submission of ads for 2007 is as follows:

Inquiries may be directed to Jennifer Brewer at 248-593-4810 or [email protected] Ad Rates: Ad Description Actual Size (w x h in inches) Price Full page 7.5 x 10 $875 Half page 7.5 x 5 - horizontal or $500 3.75 x 10 - vertical Quarter page 3.75 x 5 $315 Eighth page 3.75 x 2.5 $190 The Newsletter Committee has approved a discount of 25% for any organization advertising in three of the four annual issues. Prepayment for the three issues is required to receive the discount. Ad Specifications: 1. Ads must be e-mailed pdf or jpeg format to [email protected]. 2. In the subject line of the email please put “TMA Newsletter Ad_Issue Date”.

Example: TMA Newsletter Ad_April 2007 3. In the body of the e-mail, please state:

• What program the ad was created on • Direct contact information of the person who created the ad in case there are any issues.

Publication - 2007 January April July October

Ad Submission Due Date December 5 March 15

June 1

September 1

Publication - 2007 January April July October

Ad Submission Due Date December 5 March 15

June 1

September 1




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Documents

July 2007 TMA Detroit Volume 1, Issue 8 Newsletter TMA Detroit · 2007-08-15 · July 2007 Corporate Sponsors 2 West Michigan Press Release 3 Featured Turnaround Articles 4, 9 Getting