Disaster Drought Leaves Turnaround Gurus Scrounging for Cases

That’s less than half of the long-term average of 6.8 percent.
Turnaround advisers typically restructure operations or management, while investment banks like Evercore Partners Inc., Houlihan Lokey Inc. or Lazard Ltd. are better known for addressing capital structures and balance sheets.
At FTI, which has listed RadioShack, Peabody Energy and Hostess as clients, the restructuring unit in the first quarter earned less than a third of what it produced in the same period last year.
Keeping Busy “If I’ve got really good people, I’ve got to go bust my tail and get them busy, because I want these people here for the next boom” in restructurings, Gunby said on an April call with investors.
In the meantime, they’re staying busy with more preemptive mandates for companies looking to address problems before they’re teetering on the edge of bankruptcy, Donahue said.
It’s something companies do even if their credit is investment-grade.
PJT told investors its backlog increased in the first quarter, and that while energy is “less frenzied,” activity is picking up in power, retail, healthcare, shipping and the technology-media-telecommunications sectors.
Retail has already seen more bankruptcies in the first few months of this year than in all of 2016, and more are likely to come, according to AlixPartners.
“Many Chapter 11 filings have been small, middle-market cases,” Eisenband said.
That may bode well for the advisers who are lunching and schmoozing their way through today’s distressed drought; the financial crisis followed just a few years later.

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