Certified Turnaround Professional (CTP) Designation Award

Certified Turnaround Professional Designation from the National Turnaround Association

I’m honored and humbled to announce that I was invited to become a CTP (Certified Turnaround Professional) by the Turnaround Management Association due to my long and storied career. Turnaround Management is a highly scrutinized profession, and the CTP distinctions are objective measures that demonstrate that the holder has the experience, knowledge, and integrity necessary to conduct corporate renewal work.

When you receive your Certified Turnaround Professional designation, you are showing not just your industry, but also the business community at large, your dedication and competence in turnaround and restructuring.

Whether it be in front of a judge or in the final consideration for a deal, having your CTP can make a real difference.

In fact, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256) makes certification more important than ever. Section 415 directs courts to consider whether a professional person is certified or has otherwise demonstrated skill and experience in the bankruptcy field. This amendment makes certification a specific factor in the award of compensation to professionals.

Getting your CTP or CTA:

  • Demonstrates your commitment, competency, and expertise in the corporate renewal industry
  • Distinguishes yourself from your professional colleagues
  • Raises your stature in the corporate renewal industry to gain a competitive edge
  • Promotes the professionalism of the turnaround and corporate renewal industry

Reach out to me here.

6 Essentials of Refinancing

This article was written by Nick Welch, a Senior Manager in the Advisory and Restructuring practice at GlassRatner who specializes in Corporate Finance, Mergers & Acquisitions and Business Valuation. Nick also undertakes Litigation Support and Interim Management roles.



The bad news is refinancing can be a stressful undertaking. The good news is many obstacles can be overcome with expert help.


Other reasons to refinance include:

  1. Broken relationships can cause the borrower to seek an alternative – amicably or hostile (we see both);
  2. A change in product, for example switching from a line of credit to a factoring facility to match cash receipts;
  3. A better deal, e.g. lower interest rate, less collateral, a longer term or a principal repayment holiday;
  4. Niche products offered by a sector specialist lender – such products cater for industry nuances, for example healthcare lenders financing “out of network” receivables vs. a traditional Asset-Based Lender (ABL); and
  5. To extract more cash, for example if real estate values increase.

Refinancing could occur for any one, or more, of these reasons – we dealt with a growing number of cases in 2017 and to assist those needing to refinance, we have summarized the key areas to focus on.



Corporate refinancing takes time. It’s a big event and has serious implications on the lifeblood of a company – its cash flow.

Various stakeholders, both internal and external, need to be aligned. These include: attorneys; the existing lender; the new lender; the management team; regulators (if applicable); and auditors. Therefore set some time aside to plan the process.

Sometimes advance planning isn’t possible, for example in a hostile situation when things can happen suddenly. In this case it will be necessary to negotiate a reasonable time period for replacement funding.  Expert help is recommended to management faced with this situation.

Auditors and regulators are very important stakeholders. If refinancing is fundamental to going concern it may affect the audit opinion, or regulatory capital requirements, in which case it is necessary to complete the refinance before a final audit report is issued or regulatory returns are due.

Seasonality is important. The time of year will dictate cash needs and peaks and troughs in a debt facility meaning greater, or lesser, exposure to the lender (and company). By planning an exit in a low period, the risk will be mitigated and refinancing will be more attractive to a prospective lender (this mainly applies to working capital facilities and not term loans).

Other matters to plan for are time sensitive clauses in facility agreements. If there are early repayment penalties they need to be factored into the timetable. Careful negotiation can usually mitigate some of these, but if your company is a ‘good’ credit the lender may be strict on enforcing the penalties as a disincentive to the exit.



All strong relationships benefit from good communication.  Whether the refinance is at the lender’s or the borrower’s behest, there should be clear communication with all key stakeholders.

Frequent meetings can be held and can be used as an opportunity to demonstrate management’s willingness to achieve an orderly exit and present its plans.

Milestones should be agreed and individuals assigned as the key contact points on both sides. These individuals will manage all communication and information flow.

Financial monitoring will be part of the existing lender’s exit conditions. The package and frequency of financial information should also be agreed by all parties.  Involvement of an expert third party consultant may be helpful to provide independence and coaching if management are not familiar with the process.

Anomalies in trading, one-off events, key staff leaving and “force majeure” can impede corporate performance and result in loan default and contribute to the reason for refinancing. It is important to present this ‘story’ honestly and to reconcile why the relationship was a bad fit. A prospective lender will want to understand the reasons for the refinance and the chances are, a new lender has heard them before.

Consider how the story will be communicated to the new lender. It might be that a different approach from a lender such as less collateral, cheaper rates, seasonable repayments or other alternative products will plug the holes in the existing relationship.

Take the time to prepare a lender presentation which tells the mission of the business, the historic results, the prospects, the competitive environment as well as the strategic challenges, how they will be overcome and how funding will be used. Inclusion of sensitivities is also recommended to demonstrate how any downside will be managed.

Most importantly, support how the projections will be achieved (using third party data where available) to demonstrate the company’s ability to service the new debt package.



What type of funding does the business need?

This will vary based on sector, seasonality, life cycle of the business, the term, collateral, capital structure and risk appetite of shareholders/management, among other factors.

The main types of debt facilities are term loans, asset based lending (ABL) for working capital management, lines of credit, bridge financing and mezzanine. A business may require a mix, or one of these.

It is fundamental to understand the purpose of the finance before seeking a new deal and historic cash patterns can be mapped out to understand the highs and lows. For example, when payroll is due at the same time as significant AP accounts there will be a shortage of cash and, if the business is seasonal, high and low periods will affect cash flow. This analysis will inform how to structure the finance and make the decision making process easier.

In the case of term loans secured by real estate, there may be a low LTV due to real estate values improving. Additional equity can be drawn from the property for use in the business and may be a cheaper option than a traditional commercial loan.



The cost of debt includes fees and charges which need to be taken into account. It is beneficial to use a specialist refinance lawyer to understand agreements and the nature of any fees as well as when they become payable.

Exit fees may apply when paying down existing debt and administration/arrangement fees may apply when signing up a new debt package.  Sometimes, in relation to real estate, ‘property participation fees’ are charged and can be significant.

There may be penalties in the facility contract that trigger if the company does not perform certain conditions, e.g. non-provision of financial information, unauthorized withdrawals, set transaction volumes (invoice financing for example). Be mindful of these and ensure you discuss all costs with the lender.

The type of interest rates charged could also be fixed, variable or payable in future (e.g. PIK). To assist you, each facility should be set out using an Excel spreadsheet and the net cost calculated to enable comparison between products.



Oftentimes lenders are over-collateralized i.e. they have too much asset cover to protect their lending exposure.

This can hinder a borrower as too many of its assets are encumbered meaning excess risk is carried and assets are unavailable as collateral for an alternative lender or investor.

The existing debt package should be compared with the collateral pledged.

What is the value of the assets now vs. when the debt was first taken on?

Have any assets been sold or acquired which may weaken, or strengthen, the collateral available?

Recent appraisals will be needed for real estate, stock or plant and machinery assets. We have seen many cases where some of these asset groups can be released leaving them unencumbered and providing the borrower with greater borrowing capacity, or lesser risk. This can assist regulated entities that need to report on ‘free assets’ to regulators.

Lender permissions can also be restrictive when borrowing against certain assets, for example property refurbishment permission is usually required on an encumbered real estate asset, so remain mindful of this too if there are plans to modify certain assets later on.

Personal guarantees are required by some lenders, usually ABLs, but some are comfortable providing a facility using only company assets as collateral. If personal guarantees are provided and backed by personal assets, it may be possible to have these released on a refinance.



There is no underestimating the importance of information in a refinancing environment. During the process it is probable that additional tasks and reporting will be required of the company’s finance team and expectations should be managed.

Financial information needs to be up to date and timely. Monthly reporting is usually expected no later than 10 days after the month-end.

The information will be expected to be accurate and consistent. For example, all balance sheet reconciliations need to be performed and agreed. The statements should tie back to the accounting system and relevant metrics such as EBITDA, Free-Cash Flow and Debt Service should be presented consistently (e.g. add-backs).

Depending on the type of trade, both financial and non-financial information may be relevant. In the case of a school for example, student numbers, enrollments, graduations and withdrawals will be relevant.

Projections are usually required on a rolling basis pegged against the year to date historical financials. It is important to remain realistic with projections that can be supported. The proverbial “hockey stick” forecasts with no supporting reasons for growth are common.

The borrower should try to make easy for the lender to say “yes” to a refinance. The more reliable financial information is, the greater credibility will be.


Refinancing is necessary for a variety reasons, both amicable and hostile. Whatever the reasons, it is important to plan the process and communicate effectively with stakeholders.

Throughout the process, appropriate analysis should be undertaken to make sure the product suits the business needs and is affordable both in terms of cost and collateral.

For dysfunctional financing packages, there is help at hand if needed where plenty of opportunities can be realized.


The Value of a Successful Failure

A successful failure sounds like an oxymoron, right? Like jumbo shrimp, open secret or one of my favorites, only choice. So, what is a successful failure? It’s an endeavor that did not succeed at its original goal, but its failure taught you lessons that you turned into a success.

Apollo 13 has been referred to as a successful failure. As you may recall from the popular movie about the mission, aptly called “Apollo 13,” the spacecraft launched on April 11, 1970, the third spacecraft destined to land on the moon. But the landing was aborted after an oxygen tank exploded two days after launch. After hearing, “Houston, we have a problem” from the astronauts, NASA then spent several tense days working through multiple problems to return the crew and the spacecraft safely to earth.

Mission Control in Houston dealing with the explosion onboard Apollo 13. (Photo courtesy of NASA.org)

Mission Control in Houston dealing with the explosion onboard Apollo 13. (Photo courtesy of NASA.org)

The mission to get to the moon was a failure. The recovery of the crippled aircraft and saving the lives of three crew members was a success.

“A ‘successful failure’ describes exactly what 13 was – because it was a failure in its initial mission — nothing had really been accomplished,” said Jim Lovell, the commander of Apollo 13 as reported in an interview. But he called it, “a great success in the ability of people to take an almost certain catastrophe and turn it into a successful recovery.”

I have dealt with several successful failures in my turnaround career. By the time I’m called in, many companies are on the verge of total failure, and we are often able to salvage some value out of the company, resulting in a successful failure.

I like to think of the quote from Nelson Mandela who said, “I never lose. I either win or learn.

Read more about Successful Failures in my two-part series, “How to Have a Successful Failure.” You’ll love the story of the college drop-out who started a business and become a millionaire, then bankrupted that company. Using the lessons he learned from that failure, he started another business and became a billionaire. Now, that’s what I call a successful failure.

My book “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes,” is now available as an ebook.

Funny, But True: Friendly Fraud

As people began to think about end-of-the-year business expenses for the close of the 2016 tax year, I chuckle when I think about one of my most unusual expenses incurred on the job. I had to pay to get my license plate back.

It started as I was sitting at a red light in Juarez, Mexico, without a car in site for miles. All of a sudden, a motorcycle cop came roaring up and informed me I had been speeding in a school zone and had run a red light. Pretty miraculous, considering my car was at a standstill at the only red light for miles. When I didn’t say anything, he went to the back of my car, stole my license plate and rode off.

I was in Mexico to visit a factory that had a 17 percent a month turnover rate and a huge shrinkage rate. I had been appointed CEO of the factory, which in a case of irony, made switches for signals used in traffic lights.

When I told the plant manager what happened, he told me I’d have to bribe that officer $500 to get my license plate back, which I needed to cross back into the US and return the rental car. But lucky for me, the plant manager knew the cop and said he’d take care of it. What a guy, right?

I did get my plate back. I also learned that the plant manager only gave the cop $100 for it, stealing $400 from me. But that was nothing compared to what he was stealing from the company.

He had created and was paying dozens of fake employees and was getting kickbacks from his cousin, the customs agent, and his uncle, a local freight business owner. He was robbing the company into ruin.

He was helpful in one respect, however. He told me that company had 90 percent market share and the owners could raise the prices. That was one of my first orders of business. After getting rid of him, of course. And getting my plate back.

For more stories like this, read my book “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes,” now available as an ebook.

Funny, But True Stories: The Thoughtful Thieves


“No way that really happened!”

You know that saying, “You can’t make this stuff up.” I’ve lived that during my career in the turnaround industry. I’ve seen the look of disbelief cross people’s faces when I’ve recounted one of my unbelievable-but-true stories. Like the one I call The Cases of the Thoughtful Thieves.

I’ve dealt with my share of messy fraud and embezzlement, cases in which I had to dig deep and do a lot of research to track down the missing funds and identify the perpetrator. That’s why I was so appreciative of the Thoughtful Thieves. They made my job so much easier.

I was sitting at a CFO’s desk one time while he was on vacation. I recommend to all my clients they encourage their CFO to take two consecutive weeks off and sit at his or her desk, open their mail and just see what happens. You can learn a lot that way.

So I decided to check out this CFO’s mail. Imagine my surprise when I found bank account statements from an account in the Cayman Islands where he’d been stashing the money he had been stealing from the company. Had I been his advisor, I would have strongly recommended having those statements sent to his home or a PO box. Anywhere other than to the company he was stealing from. But maybe there aren’t a lot of fraud consultants available with these handy tips for success.

I was poking around on the computer of another CFO and found a folder on the desktop. It was password protected, but with the blessing of the CEO, I used my handy-dandy password decoder and opened it up. And I found an Excel spreadsheet neatly detailing all of the money he had stolen from the company. Everything had a date on it and tracked the path of the funds he had embezzled. He even had an entry for paying the contractor for his home, done with company funds he’d helped himself to. It’s like he had given me a gift, one that I happily shared with senior management at the company.

For more stories, check out my book, “How Not to Hire a Guy Like Me: Lessons Learned from CEOs’ Mistakes.”

Little Changes CEOs Make Can Lead to Big Ones


Trash cans and toilet paper. You wouldn’t expect CEOs to concern themselves with such mundane items. Aren’t they supposed to concentrate on managing the company’s resources, developing and implementing long-term strategies and communicating with the board of directors?

Yes, of course. But part of their overall strategy may need to include small changes in the workplace that can lead to big shifts in employee outlooks and increased productivity in the workplace.

Suzanne Sitherwood has been CEO of Laclede Gas Company since 2012. An article in the Wall Street Journal yesterday, “CEOs Sometimes Use Small Changes as Wedge for Broad Transformation,” detailed a few of the design changes she made when she took over to foster an interactive atmosphere.

These included moving into her assistant’s office, installing a round table for management meetings to foster “a sense of unity and equality” and keeping her office door open. And she banned the use of individual trash cans in offices.

Yes, that’s right. Trash cans were taken out of individual offices and moved to communal areas to encourage staffers to meet face to face. So instead of tossing a crumpled-up piece of paper into the bin by your desk, you had to get up and walk into the main area, where you just might run into a co-worker doing the same thing.

That’s one of the more creative ways I’ve heard of encouraging interaction among employees. Steve Job’s tried to institute another not-so-popular idea when he built the Pixar headquarters. He wanted to design the building with only one set of bathrooms in the atrium, rather than the usually placement of being tucked off to the side. (Fortunately for the employees in offices located far away in the wings of the building, he was overruled.)

Both these CEOs know that attention to small seemingly insignificant details like these can lead to bigger changes in their companies. Laclede Group, now rebranded as Spire, was once considered a conservative, unexciting utility. After Sitherwood took over, she turned that image around. The company made two major acquisitions of other gas utility companies, and increased the stock more than 50 percent.

A little change that that led to a major turnaround for me had to do with toilet paper. I was brought in to manage a computer parts company in Texas after the bank had forced the egomaniacal, ineffective CEO out. Although he was highly educated, he didn’t know diddly about how to treat employees.

His wife, affectionately known to the employees as the Dragon Lady, was the COO. It didn’t take me long to find out what she had done to earn this nickname. She was rationing coffee and toilet paper.

My first day there, a meek-looking secretary shyly approached me and asked for $20 to buy the daily allotment of coffee and toilet paper. I’d actually never heard the term “daily allotment of coffee and toilet paper” outside of a war-time situation. It seems Dragon Lady had limited how much of these items employees were allowed to use.

My decision was easy in this case. Banish the daily allotment – toilet paper and coffee for everyone! That one small change signaled to the employees that they mattered to the company. That one small gesture changed everything. The employees regained their faith in the company and they all begin working together to save it. We stabilized the company, sold it in six months, and all the employees kept their jobs.

There’s one change designed to improve office morale I find a little questionable. Last year President Nobuaki Aoki of the MK Taxi company in Kyoto, Japan, installed six personalized vending machines in his company.

These machines have his photo on them and in addition to snacks, dispenses sound bites in his dialect like “Groom yourself well and smile,” “Good job,” and “Thanks for working hard again today.” The idea, of course, is to boost employee morale. But I’m guessing these words mean a lot more coming from a supervisor rather than a machine.

Think about small changes in your office that could boost employee morale. But think twice about the vending machine.



Tips for Hiring from Top CEOs

Hiring the right people. We all know how important it is for CEOs and business owners to build the right team. One of the questions I enjoy the most from the “Corner Office” column in the Sunday New York Times is “What qualities do you look for in new hires?” I learn a lot about that business leader and that business from that one question.

A few weeks ago, Amy Pressman, the Co-Founder and President of Medallia, a provider of customer service technology was featured. She said in part, “I listen really carefully when I interview people for whether their narrative is: ‘Life happens to me’ or ‘I make life happen’; ‘I am owning this situation’ or ‘I am a victim.'”

She says she wants to know through what lens people look at the world – through a lens of ownership or victimization. “In any given situation, you have neither zero percent nor 100 percent control. But whatever control you have, even if it’s just 5 percent, you need to make the most of it,” she said.

For more wisdom from CEOs, read my previous post “Tips on Hiring from the Corner Office.” For example, find out what the former CEO of Marriott International says are the four most important words when hiring and another CEO’s favorite three-word question.

Qualities of Millennials and How to Work with Them, Part 1

This is the first of a two-part series on working with millennials. This first part introduces three qualities of millennials in the workplace. Part two will examine how to deal with these qualities and use them to contribute to the success of your company.

 As Principal of GlassRatner in our restructuring and bankruptcy practice, I know that to be successful, a “turnaround” must include many facets. These include financial re-engineering, legal and contractual issues, vendor and customer relations and extensive operational adjustments.

A critical part of the operational piece is not how the “widget” is made or distributed, but whether you have a motivated, dedicated workforce to accomplish the corporate goals. Most company’s workforce is multi-generational and the millennial component is becoming more and more important to one’s success.

Millennials have officially taken over as the group with the largest demographic in our country. Numbering 75.4 million, they recently overtook baby boomers, according to a recent survey released by Pew Research Center. Last year, this generation also took over the majority of the U.S. workforce.

So odds are great that you work in an office with millennials. And if you don’t you still come in contact with them every day in the business world. This generation has some qualities that are different than previous generations — in their work habits, outlook on life and even what motivates them.

So Baby Boomers and Gen X can all lament about it, joke about it and get frustrated about it. Or they can try to understand the qualities millennials bring to our businesses and use them to our advantage.

Megan Abbott is a millennial life coach — yes, there is such a thing — and founder of Fruition Personal Coaching. In an article in Forbes, “Study: Millennials’ Work Ethic Is In The Eye Of The Beholder,” she said,  “Older employers can disapprove and judge millennial values as inferior to their own … or they can accept and strive to understand what drives this new generation.”

As a first step to understanding, here are three qualities that have been identified as defining the millennial generation.

  1. They are tech savvy.

Millennials are the most connected generation in history, and have been referred to as digital natives. They grew up with technology at their fingertips and never took a photo on film, listened to something on a tape and have probably never sullied their fingertips with ink rubbed off a newspaper.

People in older generations are what is referred to as digital immigrants. Generally, they have had to migrate over to each massive shift in technology, adapting to a new way of doing things.

  1. They are not as motivated by money.

You’ve got some employees doing a great job and seemingly happy doing so. Then one day they just quit, possibly with no other job or one at a lot lower salary. It’s happened in companies that I’ve re-engineered and has probably happened to you. What’s that about?

While millennials are definitely motivated, it isn’t always about making money.

They want a good quality of life and want to change the world for the better. While baby boomers seek money, an impressive title and recognition, millennials want to know how their work fits into the bigger picture.

  1. They are used to working in teams and are creative in finding solutions.

Education styles change. While many previous generations primarily learned on their own, millennials were educated in a more collaborative method. They are more comfortable working in teams and also place a high value finding creative solutions to problems.

Do these qualities sound familiar? In the next blog, I’ll discuss how to leverage these qualities to contribute to the success of your company.

Listen to the Right People, And Trust Yourself in a Crisis

“Management is doing things right; leadership is doing the right things,” said Management Consultant Peter Drucker. The problem comes when a business faces a crisis and the leader no longer can determine what the right thing is.

I wrote a white paper once on 5 Faux Pas of CEOs in Crisis, which you can view on my blog. One of these faux pas is that they are only as smart as the last person they talk to.

When faced with a crisis, some CEOs and business leaders cease to think for themselves. Perhaps it’s because they feel responsible for the crisis in the first place and maybe they’ve lost confidence in their ability to lead. They no longer trust their own judgment.

By itself, this dip in confidence does not spell the death of a company. In fact, that is often when the smart leader knows to ask for help to get the company back on track.

But what I’ve seen happen many times is that the CEO begins consulting several people, which I would generally recommend as part of the effort to gather as much information about what can be done to get out of the crisis. But rather than compiling all that information and making a judgment based on the best direction to go, the CEO instead changes plans according to whatever the last person told him to do.

I once worked with a non-profit educational institution. The president had been let go, deservedly so. The interim president was changing the restructuring plan with every person he talked to. There were new firings and closings announced every week, and when he got objections to the firings, he would call those he fired to tell them to continue in their jobs.

Needless to say, the institution was in chaos. Imagine yourself going to work not knowing whether you’d be fired that day or not. And whether you really had been fired or you’d later be told, “Oh, never mind!”

He finally did make the decision to hire me, which he may have regretted when I fired him six weeks later.

Yes, it’s good to consider a lot of options and gather a lot of information when making a plan to get your company out of crisis. And it is key to talk to the right people. And how do you know who the right people are?

I read good advice on this topic yesterday in the New York Times, in an interview with Ron Kaplan, the chief executive of Trex, a manufacturer of outdoor decks. As a young controller at a forge that was losing a lot of money, the chairman asked him if he wanted to be general manager. He said yes, although he knew nothing about running a force.

He followed his father’s advice and looked for people with experience and made them his best friends. How did he know which people to listen to?

“By watching and listening,” he said. “When people speak, you measure the variance between what they tell you is going to happen and what actually happens.”

Look for people with experience and credibility. And after speaking to the right people, pick a well-considered plan and stick to it. My analogy is that you are building a house of cards. Each fragile layer is dependent on the foundation below it. Continually move that foundation and you could end up with just a failed mess.

As Charles de Gaulle said, “Faced with crisis, the man of character falls back on himself. He imposes his own stamp of action, takes responsibility for it, makes it his own.

The Turnaround Management Association is hosting its 9th annual Southeast Regional Conference at the historic Jekyll Island Club Hotel May 29-30. I’ll be on a workout panel, called Titans of the Turnaround. Hope you can join me at this fun and informative event!