Fixing a Broken Company: Insights into Restructuring and Turnaround Advisory Work

March 18, 2010
Faculty Lead: David C. Smith

Corporate debt default rates have exploded in the wake of the recent turndown in the economy. Record numbers of overly leveraged and poorly performing companies are now financially distressed, and today’s tight credit markets means there is no easy fix available to firms that cannot make their scheduled debt payments. Consequently, a large segment of corporations are now in need of the services of the restructuring advisory industry. Simply put, it is the restructuring advisers who fix companies that are badly broken. But in today’s complex business environment, it takes a “village” of restructuring experts with a variety of skills to effectively turn around a distressed company. Today’s restructuring advisory sector employs a wide variety of professional service firms that together can revamp the distressed firm’s capital structure, replace a sagging management team, improve accounting and IT standards, and provide expertise on how to turn around the operations of a poorly performing firm. 

A panel of representatives involved in this industry addressed the following questions:

(1) Where specifically does your role as a restructuring/turnaround professional fit into “fixing a broken company”?
(2) What are the potential career paths for students interested in your particular segment of the restructuring/turnaround industry?
(3) What is the current state and near-term outlook for the restructuring and turnaround industry? (Put differently, where are we right now in terms of observing a continued flow of distressed and broken companies?)

Duke Best (Darden ’08), AlixPartners
Tinamarie Feil, BMC Group
James Marshall (McIntire ’98), PricewaterhouseCoopers
Ben Pickering, Mesirow Financial
Bill Shaw, Rothschild