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  • The Turnaround Management Association teams up with UTS to train people to save ailing companies

    19-11-09
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    The emerging specialist field of turnaround management – saving critically injured companies – is being recognised with the launch of three new executive certificate courses by the University of Technology, ...

    The emerging specialist field of turnaround management – saving critically injured companies – is being recognised with the launch of three new executive certificate courses by the University of Technology, Sydney and the Certified Turnaround Professional (CTP) designation by the Turnaround Management Association of Australia (TMA).

    Developed in partnership by the UTS and the TMA, the courses are the first of their kind in Australia to focus on the skills of restoring value to struggling enterprises and avoiding terminal insolvency.

    To be offered from February next year, the courses will develop key skills in leadership, legal and accounting in turnaround situations and will teach students how to assist companies to recover and avoid insolvency.

    "Like an emergency room doctor, the talent lies in making critical decisions quickly when there is imperfect information" said TMA Australia President, Adrian Loader.

    "Until recently turnaround specialists were a relatively unknown breed in the business world. However, as once-stable companies struggle to maintain profitability and deal with leverage issues, the expertise of business renewal professionals are more in demand than ever.”

    "The turnaround specialist must enter a company with objectivity and often develop a fresh approach. Operating in the eye of the storm, they have to manage angry creditors, anxious employees, wary customers and a nervous board of directors.”

    "Of course there's often a lot at stake as we're well aware from the corporate collapses that resulted from the recent global financial upheaval.  We want students to go through real life examples and learn from other peoples’ mistakes and successes.”

    "The TMA exists to support the growing number of professionals entering this important field and the UTS courses are an important step in the development of relevant skills in the Australian context," Mr Loader said.

    The three executive certificates within the UTS Turnaround Management Association Program are – Leadership for Turnaround Practitioners, Accountancy for Turnaround Practitioners and Commercial Law for Turnaround Practitioners.  These courses will be taught by academics from the UTS faculties of Business and Law and turnaround experts from the TMA. Completion of each course will earn a one subject credit towards a UTS MBA degree and accreditation as a turnaround practitioner with TMA Australia. The courses will be offered during February and March 2010. Each is of 40 hours duration and can be undertaken in a flexible format to fit with work commitments.

    About TMA Australia

    The Turnaround Management Association of Australia is an international, not for profit association, dedicated to corporate renewal and turnaround management.

    Membership is more than 310 in Australia and 9000 internationally and is mostly made up of professionals practicing in turnaround management, law, insolvency, management consulting, banking, finance and private equity.

    Students who complete the course and become members of the TMA will be eligible to receive the Certified Turnaround Professional (CTP) designation which provides evidence of an individual’s commitment to the turnaround and corporate renewal industry and also attests to a level of expertise that non-certified professionals may find difficult to prove.

    Completing the CTP certification process provides a corporate renewal professional with a solid foundation to operate successfully in the industry and could very well enhance future earning power.

    For more information on the TMA and courses, including costs, visit: www.turnaround.org.au or www.tmacourses.uts.edu.au

    Contacts

    Adrian Loader, President, Turnaround Management Association of Australia, 02 8228 8700

  • Group Insolvency Reform: the tipping point ahead

    26-08-09
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    Article by Michael Sloan, Why has the Model Cross Border Insolvency Law not been used on a regular basis in Australia?  The answer is simple.  Virtually all international ...

    Article by Michael Sloan,

    Why has the Model Cross Border Insolvency Law not been used on a regular basis in Australia?  The answer is simple.  Virtually all international businesses operate on a group basis.  The Model Law, however, does not deal with group insolvency.  It operates on a single corporate entity basis. That will change.  UNCITRAL has a committed working group developing amendments to the Model Law to accommodate group cross border insolvency (Australian Treasury official Andrew Gellars is a member).

    Australia is a geographically isolated island continent with a sophisticated and established corporations law.  The vast majority of international companies operating in Australia do so via international Australian incorporated subsidiaries.  In a group insolvency, the Centre of Main Interest for the Australian subsidiary will almost certainly be in Australia.

    That is why our major cross border insolvency cases (together with the relative economic strength of the Australian economy) have not seen the operation of the Model Law.

    There have been two successful cases of the Model Law: Samsun and Betfair.  Both delivered excellent results for creditors.  With many international collapses occurring without the Model Law being used, these two cases have stood out for their rarity.

    That will change if a workable, group-based reform is made to the Model Law.  As would be expected, the most difficult issue to be addressed is the definition of the location of the Centre of Main Interest. 

    Once that is resolved (and it is at least a year away), and the reforms are implemented, then we could see a tipping point for the use of the Model Law.  The Centre of Main Interest would usually be the domicile of the parent as opposed to the Australian subsidiary.  We could see far more foreign representatives obtaining recognition in Australia and more Chapter 11 style insolvency administrations being given recognition.  When the reform comes in the next couple of years, it may prove to be the most significant reform since Harmer. 

    About the Author

    Michael Sloan is a partner in Blake Dawson's Restructuring and Insolvency team and an international consultant to the Asian Development Bank on international insolvency law reform.

  • TMA Turnaround of the year awards - NSW state winners

    20-08-09
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    NSW state winners were announced at the ANZ Great Debate held in Sydney on the 19th of August 2009 NSW winner for small turnaround of the year (<$50M turnover) ...

    NSW state winners were announced at the ANZ Great Debate held in Sydney on the 19th of August 2009

    NSW winner for small turnaround of the year (<$50M turnover) was 180 Corporate for Aircom Systems

     180 Corporate has won the NSW turnaround of the year award for a small company (revenue less than $50m) for the turnaround of Aircom Systems. In December 2007 Aircom Systems engaged 180 Corporate who advised that urgent turn around action was required that involved changes in the business model, financing of assets and negotiations with the bank and unsecured creditors. The turnaround was implemented in a two stage process that involved initial crisis management and then a longer term turnaround plan. The turnaround was successful and 2010 will be a profitable year for the company after all the necessary write offs have been taken and creditors paid in full.

     

    NSW winner for large turnaround of the year award (>$50M turnover) was Anchorage Capital Partners for Golden Circle

    Anchorage Capital Partners has won the NSW turnaround of the year award for a large company (revenue in excess of $50m) for the turnaround of Golden Circle. Anchorage invested in Golden Circle in October 2007 taking a 35% ownership in the company. While Anchorage was in control of the asset they went about implementing both the operational and financial restructure of Golden Circle along with recruiting a new CEO before selling Golden Circle to H.J. Heinz in December 2008. Upon exit Anchorage realised an IRR of 129%.  

     

  • Presidents message

    13-08-09
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    It has been a year of great change for the Turnaround Management Association of Australia, with several milestones either having been met or about to be met. Firstly, I would ...

    It has been a year of great change for the Turnaround Management Association of Australia, with several milestones either having been met or about to be met.

    Firstly, I would like to thank my predecessor Ian Johnson for continuing the long line of outstanding work that has been undertaken by TMA Presidents in the past which has now placed us on a very firm platform to be the pre-eminent turnaround organisation in Australia. Ian has worked tirelessly over the last 18 months and has been instrumental in supporting the investment in the redesign of our website, as well as implementing significantly improved business planning processes and the ongoing development of the Certified Turnaround Professional ("CTP") Program.

    During my tenure, the website and the CTP program will be delivered to the members, however the credit for these significant developments lies with many others including Nick Samios, Chairman of the Education Committee, Rod Cunich, Chairman of the Membership Committee and Michael Fingland, Chairman of the Communications Committee. A huge thank you to their committee members.

    The CTP program which will be run in conjunction with the University of Technology, Sydney, will represent the most significant milestone yet for the TMA here in Australia. This program will provide a visual accreditation to all members who have met the requirements for elevation to our CTP designation. Over the next few months, we will be releasing more details of the course outline of the CTP program which will be able to be undertaken by way block style 5 days programs run by UTS.

    The communications committee has also released the proforma draft format for our first newsletter. We truly hope that our members will take the opportunity of sharing their experiences with their fellow members. There are several sponsorship opportunities available promoting your firm or your individual credentials through this medium.

    In  May of this year, our collective membership grew to exceed 260 members. This is significant in it’s own right but impressively places us as the largest international chapter for the TMA outside of the United States of America. Our community development programs with Special Olympics are being talked about overseas and being emulated. One of my goals over the next 18 months will be to assist in the establishment of our Sportsman’s Lunches in Melbourne and Perth. These are a great opportunity to showcase`the TMA to our clients, employees and fellow professionals.  

    Over the next 12 months, through my travels around Australia, I will be endeavouring to visit the state committees on as many occasions as possible. Please feel free to call me with any issues that you may have or if you have any ideas in relation to improving our association for the benefit of our members. I would also like to issue a call to arms to all of our members to move off the sidelines and get involved in the state and national committees as well as the respective sub-committees. Should you wish to be involved, please call either your state chairman or alternatively call me directly and I will facilitate an introduction or a role! .

    Kind regards,

    Ian Hyman

    President
    TMA Australia

  • Member Case Study: Vantage Performance

    04-08-09
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    Member Case Study Company / Project Name: Brisbane Concrete Pumping Meales Pty Ltd TMA Member Involved: Vantage Performance, a specialist profit improvement and turnaround management firm www.vantageperformance.com.au Background: ...

    Member Case Study

    Company / Project Name:

    Brisbane Concrete Pumping Meales Pty Ltd

    TMA Member Involved:

    Vantage Performance, a specialist profit improvement and
    turnaround management firm www.vantageperformance.com.au


    Background:

    Brisbane Concrete Pumping is Queensland's largest concrete pumping business with a blue chip client base and over 80 employees.

    It services all areas of the market but specialises in large scale high rise, civil, commercial and industrial projects.

    Brisbane Concrete Pumping commenced operations in 1980 with one boom pump.  It has grown steadily and now operates a fleet of over 50 pumps ranging in size from 25 metre boom to a 46 metre boom, as well as several satellite pumps.

    Key Issues:

    • Lack of financial management depth
    • Poor management of working capital
    • Excessive debt funding
    •  Poor project pricing / Inability to accurately assess project profitability
    • Insufficient equipment utilization

    Major Initiatives:

    Vantage Performance developed a Turnaround Plan in conjunction with management which was presented to key stakeholders including 12 financiers, union officials and major creditors.  Vantage Performance then project managed the implementation of the Turnaround Plan.

    A significant component of the Turnaround Plan involved financial re-engineering of the business, including:

    • Strengthening the management team through recruitment of a Managing Director and Financial Controller
    • Implementation of a board structure
    • Facilitating an equity injection of $2m
    • Facilitating a vertical integration merger with Shepherd’s Contracting, a concrete laying business turning over $22m
    • Renegotiating equipment finance debt of $14m across 12 financiers
    • Improving internal controls through implementation of a 13 week cashflow forecast and integrated financial forecasts along with more robust financial and operational KPI’s.

    Outcome:

    The business returned to profitability within 6 months and has continued to improve both in terms of revenue and earnings growth.

    Outcome:

    The business returned to profitability within 6 months and has continued to improve both in terms of revenue and earnings growth.

  • "Insolvent trading laws - It's time for a change" by Scott Butler

    29-07-09
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    Member Article “Insolvent trading laws – It’s time for a change” by Scott Butler - Partner at McCullouch Robertson Lawyers. Australia has, perhaps, the harshest insolvent ...

    Member Article

    “Insolvent trading laws – It’s time for a change”

    by Scott Butler - Partner at McCullouch Robertson Lawyers.

    Australia has, perhaps, the harshest insolvent trading laws in the world and they are a significant impediment to the success of turnaround in Australia.

    Under the Corporations Act 2001, subject to some limited defences, if there are reasonable grounds for suspecting their company is insolvent and a director is aware of this or ought reasonably to have been aware of this, a director must not allow the company to incur a debt.

    A director found guilty of insolvent trading faces civil and possibly criminal penalties as well as being personally liable to compensate creditors for losses.  This means that directors are walking a legal tightrope if they attempt a turnaround and directors may decide the safer option for them personally is to place the company into external administration.

    In response to this problem, the secretary-general of the Law Council of Australia, Bill Grant wrote to the Minister for Financial Services, Superannuation and Corporate law, Chris Bowen on 1 July 2009 recommending changes to the insolvent trading laws in the form of a new ‘business judgment’ based defence.

    The new defence would permit a director who had obtained appropriate restructuring advice, on the basis of accurate accounts, to form an honest business judgment as to whether the interests of a company and its creditors were best served by pursuing restructuring options.

    The key to the new defence is that it would only be available to those directors who had obtained appropriate advice from insolvency experts about a restructuring based on accurate accounts.  If the directors then formed an honest view that a restructuring was in the best interests of the company and its creditors, they would have a defence.

    The majority of directors who trade whilst insolvent are those of small to medium companies.  Generally they will not have obtained appropriate advice before doing so, or if they have obtained some advice, it won't have been based on accurate accounts, so this new defence won't assist them and the new defence will not mean that all directors will be able to trade whilst insolvent without fear.

    The new defence is really aimed at public companies or large private companies whose directors take their insolvent trading responsibilities more seriously and take proper advice before undertaking any course of action.   Those directors are less likely to place themselves at risk of personal liability if they don't need to.  They can be more detached when making decisions to resign their positions as directors or place the company into external administration. 

    The business judgment defence proposed would maintain the objectives of the current law, without impeding honest efforts at restructuring based on professional advice, and is to be commended.