In my January 20th post, “Distressed Investing Conference #1,”  I wrote, “…the Turnaround Management Association today might more appropriately be called the ‘Restructuring Management Association’ because so much of the educational content focuses on transactions and Chapter 11 rather than on the nuts and bolts of actually fixing distressed companies.”

In the most recent issue of The Journal of Corporate Renewal, in an article, “We are on a dangerous course,” David C. Finkbiner, CTP raised exactly the same issue AND pointed out the ethical conflicts inherent in situations in which “turnaround” experts get a piece of the action for selling companies.

In describing recent Turnaround Management Association panels, he said, among other things,

1. For most companies, Chapter 11 is not the best solution.
2. Few turnaround professionals are actually doing turnarounds because too many structure their fee arrangements to provide higher compensation for selling a company than for turning it around.
3. As a result, many companies that could have been turned around have been sold for less than the value would have been realized had a turnaround occurred.

In response to my email to David saying that I wholeheartedly agreed with his article,  he wrote that he had been hearing from “real turnaround people” all over the country–people who actually do TURNAROUNDS–who feel the same way.

I encourage you to read his thoughtful article.

Tomorrow, I’ll be leaving for the TMA’s (Turnaround Management Association’s) Distressed Investing Conference. http://www.turnaround.org/Events/Calendar.aspx?objectId=9313

When I first joined TMA approximately 15 years ago, the members were mostly other turnaround experts, like me, and the sessions focused primarily on turnaround issues. The sessions were filled with practical advice for people who actually turned around troubled companies. Not only did I always leave with valuable tips, but I also identified people who might help my clients survive. For example, Biff Rutenberg, Atlas Partners, was a panelist at one of the first conferences I attended. A couple of years later, when a client with over 60 locations needed to shed some properties and leases, Atlas Partners was a great help to them. http://www.atlaspartners.com/ap/

Today, TMA feels very different to me. Both the industry and the organization have matured. In addition to turnaround experts, the organization now has many lenders, attorneys, accountants, and other service providers, and the emergence of the mega-turnaround firms has changed the landscape.

The changes have expanded the spectrum of resources available to members; however, the Turnaround Management Association today might more appropriately be called the “Restructuring Management Association” because so much of the educational content focuses on transactions and Chapter 11 rather than on the nuts and bolts of actually fixing distressed companies.

I am looking forward to the case studies which promise “operational” content and to seeing people I haven’t seen in years…..