The Newsletter of. From Our President Dan Wikel, Huron Business Advisory. The Year of the Committees... TURNAROUND MANAGEMENT ASSOCIATION

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1 The Newsletter of Corporate R enewal TURNAROUND MANAGEMENT ASSOCIATION Chicago/Midwest Chapter From Our President Dan Wikel, Huron Business Advisory The Year of the Committees... Volume 15 Issue 5 October 2014 As the year of the TMA committees comes to a close, I want to commend and thank all of our hard-working committee members for another year of great programming and terrific events. As president, I was in a unique position to observe most of the behind the scene efforts and planning for your TMA events and programs. What struck me was the willingness and energy among the committees to continuously improve our annual programs as well as come up with new and fresh ideas. TMA Events and Programs: Continuous improvements provided something for all members What s Inside? VP s Corner... 3 Upcoming Events... 4 Past Events Why Branding Is an Integral Part of the Turnaround Process (article) From the Blog New Member Listing Member News What s the Deal? Newsletter Advertising Information Memorial Scholarship Foundation Board of Directors Chapter CTPs and CTAs Membership Application Board Member and Steering Committee List Platinum & Gold Sponsors TMA members had an opportunity to give back to the community at Deborah s Place in August. The Pro Bono Committee asked TMA members to leave their office and spreadsheets and really get their hands dirty with some carpentry work and light gardening. In addition to giving back to the community, new friendships were made and everyone had a lot of fun! Thanks Lou Marosi and Barb Yong for making this happen. After ten years of Texas Hold em event, the NextGen Committee took its annual fall event to the next level with a marquee event featuring our very own TMA member, John Lyons, in the Not for Profit Band. A large crowd turned out at the House of Blues for a new and fun networking event, Let s Get Blue. Live music, raffles, a photo booth, a little of something for everyone, in a very fun environment. Thanks to the NextGen Co-chairs Angela Allen, Kat Parker, Alex Boerma, and Michael Teplisky for your passion to make this event a memorable experience for everyone that attended. The Breakfast Forum Committee was challenged to think out of the box this year and they did not disappoint. From hosting four outstanding programs that focused on specific and unique turnaround situations to mixing up the time we offered the program (breakfast vs. lunch) to trying new venues it was a great year. In January, the year kicked off with economist Bill Strauss of the Federal Reserve Bank of Chicago. The chapter has not welcomed an economist to speak in several years so it was good to hear Strauss' forecast for 2014 (perhaps we should we replay his presentation and see if he was right?). March welcomed Mike McAvoy, the president of The Onion who actually made it humorous to see how much fun (or funny) a corporate turnaround can be. We also turned that event into a lunch instead of breakfast. June was another special program. We enjoyed breakfast at a new venue, The East Bank Club. If you did not attend, you missed out on a great turnaround story from principal Ms. Liz Dozier of Fenger High School and the CNN show Chicagoland. And, most recently, our September lunch program highlighted an outstanding panel of experts that discussed the merits and pitfalls of a hypothetical Chicago bankruptcy situation. continued on page 2

2 continued from page 1 Again, these programs were fairly focused topics but very informative and interesting. I still chuckle when I think back to when I received a flurry of s during the announcement of The Onion lunch program and the notion that our TMA Chicago/Midwest Chapter was on the brink of bankruptcy. It was a very clever marketing piece curated by our Breakfast/ Lunch Committee. Thanks to Gordy Gouveia, Ryan Jaskiewicz, and Evelyn Berthold for your leadership and creativity to mix things up. Our annual Sponsorship Appreciation event was also a huge success. After listening to our members feedback from years past, this year s event was more networking focused and FREE to our generous sponsors. Thanks to members of our Sponsorship and Entertainment Committees for exploring a new format and venue: Joel Schneider, Erik Chalut, Rob Meyers, George Mesires, Tom Goldblatt, and Michael Brandess. The CTP/CTA programs provided great content to its members this year, including a unique lunch and learn followed by a round of golf at the exclusive Onwensia Country Club. Thanks Duncan Bourne, Tom O Donoghue, and Kobus van der Zel. And, lastly, the annual Milwaukee Summerfest event was a Big Bang (literally). Because of weather issues from the prior day, guests were provided an entertainment bonus this year, as everyone had front row seats for a truly spectacular fireworks display. Thanks Gene Arenson, Bill Farrar, Michael Bates, and Tom Jones. The continuous improvements to our TMA events and programs provide our membership with many opportunities for quality programs and networking and even the old guard of the TMA to keep coming back! Earlier, I mentioned our Sponsorship Appreciation event. As our sponsors know, this year s reception was held at Chicago Cut, a top-notch venue with outstanding food, service, and drinks. I think after a few years of alternative venues at a modest cost, we may have found the sweet spot for future sponsorship appreciation events. For those members at firms that may have not sponsored in the past, 2015 will be the year to get involved and be a sponsor. In addition to all the benefits sponsors enjoy, I hope the annual appreciation event may push you and your firm to make the commitment. It s not too late to enroll as a 2015 sponsor: Have your name/brand displayed on our website year-round Enjoy breakfast programs and/or luncheons at no cost Receive free advertising space in our newsletter Attend the Annual Executive Speaker Forum at a discount And, of course, become part of an exclusive group who are invited to the annual sponsorship appreciation reception for free! I am looking forward to the remainder of The Executive Speaker Forum committee is very excited about our annual event featuring Mitt Romney and guest moderator David Snyder of Crain s Chicago Business on November 24 at the Radisson Blu Aqua Hotel. The focus of the discussion with Mr. Romney will be on his business career and insight from his past experiences with Bain Capital, as well as the challenges he faced with the 2002 Olympics. I am sure he will weigh in with a few political views as well, but we look forward to a high energy and entertaining evening. Concluding 2014 and the 2015 Outlook By the end of the year, our chapter will provide its members with more than 50 programs and networking events between Chicago and Milwaukee. No other TMA chapter provides more variety and number of events. As the new year approaches, all of us will be hoping for success in 2015, to reap the fruits of our labors, and to see our networking and business development efforts result in enhanced referral relationships and new opportunities. Moreover, we are in the middle of our annual succession planning as the chapter has selected its new officers, directors, and co-chairs for its 15 committees in Under the leadership of incoming president Aaron Hammer, the 60 incoming volunteer leaders are well positioned to advance our chapter into the new year. We also welcome many new co-chairs to the leadership team in 2015 an important part of ensuring new ideas and programs that will continue to enhance the chapter s value proposition to our members and sponsors. Indeed, this year s successes are a result of the tireless efforts of our 2014 leadership team, our generous sponsors, and each one of our almost 1,000 TMA Chicago/Midwest Chapter members. I thank all of you for your support and dedication to advancing the corporate renewal industry and our chapter s value proposition. It has been both an honor and a pleasure to serve you. And I thank Aaron Hammer for accepting the torch and lighting the way into 2015, and Mike Egan as our president-elect and eventual president role in The chapter is in good hands. In closing, I challenge all of you to continue to reflect on your personal and life goals, maximize your network, share ideas, drive new business opportunities, and continuously improve our own disciplines in the corporate renewal industry. VP s Corner Thoughts from Zachary Garrett, VP Communications Goldberg Kohn Ltd. Enjoy Your TMA Membership In previous editions of this newsletter I highlighted the many ways in which our members may maximize their TMA membership. I now aim, in this final installment of the 2014 newsletter, to tie these themes together and emphasize one of the most important, if not obvious, benefits of being a member: the opportunity to have fun while developing valuable professional relationships and skills. But first, a recap of what we have learned. For those who may have missed prior editions of the newsletter, each can be found on the chapter website, tmachicagomidwest.org. In the January edition I emphasized the valuable educational, leadership, and development opportunities our chapter provides, all designed to help our members become leaders and experts in their fields. Indeed, your chapter works hard to provide the veteran practitioner, the newly-initiated, and every professional in between with flexible and continuing opportunities to learn, teach, and grow within their local and broader communities. Whether it is by attending events, assuming a leadership position, or writing an article for the newsletter or the blog, the TMA makes it easy and affordable for members to invest in their professional development. In the March edition I highlighted the ways in which our chapter makes it easy for members to stay connected to one another both personally and professionally. As it can be difficult to connect with colleagues, clients, and friends within the industry when work, social, and family obligations vie for our time and energy, the TMA offers a one-stop-shop for networking and educational opportunities. Indeed, for turnaround professionals in Chicago, Milwaukee, and the greater Midwest, the TMA's Chicago/Midwest Chapter offers entertaining and comprehensive programs to keep us all connected all you need to do is attend, participate, and connect. In the May edition I focused on the ways in which our chapter helps its members to build and maintain client relationships. Whether it is by networking at an entertainment event, participating in a breakfast or lunch forum, or serving as a panelist in an educational workshop, our chapter provides many opportunities to promote you and your firm through meaningful one-on-one interaction. In addition, our chapter offers members a variety of advertising and marketing options to promote their brands. Such options include advertising in this newsletter, becoming a sponsor and sponsoring chapter events, writing a newsletter article or contributing a blog post, and publicizing your recent accomplishments in the "Member News" and "What's the Deal?" features in this newsletter. The opportunities are there to build your business just sign-up, show up, and promote! Most recently, in the August edition, I emphasized our chapter's focus on diversifying its membership across age groups and experience. We recognize that the future of our organization resides in younger professionals who are blazing new trails in the turnaround and corporate renewal industries. It is therefore important that we encourage and foster the growth of our younger members, whose energy and enthusiasm add vitality to our events and a fresh perspective to our educational programming. The engine that continues to drive this growth is our NextGen program, which now boasts more than 130 members (and growing). Through the NextGen program and other exciting initiatives, we make it easy and affordable for young professionals to build their networks, learn from experienced practitioners, and grow our dynamic organization. The tie that binds all of these themes together is the opportunity to have fun while building your personal and professional networks. One of our chapter's primary goals is to make professional development an enjoyable and rewarding experience. As volunteers and fellow practitioners, your chapter's TMA leadership understands the professional, social, and family obligations that compete for your time and energy obligations that can make it hard to achieve the level of business development and continuing education that you desire. It is our mission to deliver these opportunities to you in a comprehensive, accessible, and affordable manner. And we seek above all to do so in a way that accommodates your schedule, goals, and interests. Through a dynamic mix of social and educational programs, we make professional development easy and fun. All you need to do is show up, participate, and get involved. It truly is that easy to maximize your TMA membership. It has certainly been a fun and rewarding year as your Vice President of Communications I look forward to seeing you at the next event and I eagerly await the exciting new initiatives on tap for August 2014 Page 2 The Newsletter of Corporate Renewal is a publication of the Turnaround Management Association Chicago/Midwest Chapter. It is issued five times annually. Submissions to the newsletter should be directed to: Amanda Sturderant, asturderant@morrisanderson.com August 2014 Page 3

3 Upcoming Events: The Details Women's Luncheon Wednesday, November 5, 2014 Petterino's, 150 N Dearborn, Chicago Women's Creative Art & Networking Joint event with IWIRC Wednesday, November 19, 2014 bottle & botega, 1241 S Michigan Ave, Chicago Executive Speaker Forum Monday, November 24, 2014 Radisson Blu Aqua, 221 N Columbus, Chicago The Annual 2014 Holiday Party Tuesday, December 9, 2014 John Barleycorn River North, 149 West Kinzie, Chicago January Breakfast Forum Friday, January 9, 2015 The Standard Club, 320 South Plymouth Court, Chicago Milwaukee Post-Holiday Reception & Dinner Thursday, January 15, 2015 The Grain Exchange, 225 East Michigan, Milwaukee TMA Global Distressed Debt Conference February 11-13, 2015 The Four Seasons, Las Vegas, NV For more information on these and all other chapter events, please visit Executive Speaker Forum Turnaround Management Association Chicago/Midwest Chapter Presents Prepackaged Bankruptcy Revisited at July Program at thewit Hotel By Mark S. Melickian, Sugar Felsenthal Grais & Hammer LLP On July 24, the Continuing Education Committee hosted a quartet of heavyweight restructuring professionals at thewit Hotel for a half-day program titled Prepackaged Bankruptcy: A Hidden Prize in Every Round? The subject of the program was the formulation, preparation, and trials and tribulations of prepackaged chapter 11 bankruptcies. Master of the octagon, Marc Kieselstein of Kirkland & Ellis, was joined in the cage by industry colleagues who had fought alongside him on some highprofile prepack cases: Kevin Nystrom of Zolfo Cooper (CRO, The Dolan Company), investment banker Durc Savini of Peter K. Solomon (The Dolan Company) and Dennis Stogsdill of Alvarez & Marsal (CRO, Revel AC Inc.). Kieselstein and his battletested colleagues used a combination of PowerPoint presentation and war stories to take participants through several rounds, covering the selection and negotiation of types of prepackaged plans (e.g., gift plans, cram down plans, and cram up plans), methods for treating unsecured claims, structuring plan support agreements, establishing and keeping to key benchmarks and milestones, and creating and managing a consenting impaired class of creditors. The quartet contributed some outside-the-ropes tales about the confirmation and aftermath of a number of recent high-profile prepack cases including the casino Revel AC Inc., which just filed for round two, DexOne/Supermedia, and The Dolan Company. The undercard featured welterweights Nicholas Miller of Neal Gerber & Eisenberg LLP and Mark Melickian of Sugar Felsenthal Grais & Hammer LLP, who danced and jabbed their way through the following topics: non-bankruptcy restructuring options (e.g., out-of-court, ABCs, receiverships, UCC remedies), bankruptcy options (363 sales, free fall plans, prenegotiated plans and prepackaged bankruptcies), and the mechanics of the prepackaged plan, including voting/solicitation requirements, prepack-specific first day and scheduling motions, the typical post-filing timeline and notice requirements. In between rounds, Miller entertained the crowd with soliloquies that somewhat resembled restructuring jokes. The fight was declared a draw. Fight night was capped by cocktails on the rooftop deck of thewit Hotel co-promoted by the Continuing Education, Women s, Entertainment, and Membership Committees. The drinks flowed, cards were exchanged, and the weather was cooperative. The Continuing Education Committee (Nicholas Miller, Mark Melickian, David Serritella and Brian Whittman) expresses its thanks to its co-promoters (Women s, Entertainment and Membership), to the program panelists, to Chris Glatz and Sue Fischer, and to thewit Hotel for an outstanding mid-summer event. Jim Suehr, Tom Downey, Brian Whittman, and Jonah Galaz-Englebert August 2014 Page 4 The Honorable Mitt Romney Monday, November 24, 2014 Radisson Blu Aqua Hotel 221 North Columbus Drive, Chicago, Illinois Table packages are selling fast! Contact Chris Glatz at (815) or cglatz@managementservices.org Tina Cohen, Keara Roethke, and Tracy Ickes Roger Higgins, Hon. Janet Baer, Karen Goodman, and Michael O'Neil Kevin Nystrom, Bill Avellone, and Dan Wikel, CTP Photos by Linda Dove August 2014 Page 5

4 TMA Milwaukee Bocce Ball By Gene K. Arenson, HYPERAMS LLC The TMA Milwaukee Programs Committee held its first Bocce Ball event at the Italian Community Center in Milwaukee on August 5. There was a great turnout with eight teams competing on four indoor Bocce courts. The winning team included David Levy, Michael Bates, Ray Neihengen and Bill Stoll, with a team name of The Brewers. NextGen Samples a Taste of Italy By Angela M. Allen, Jenner & Block LLP On August 14, the NextGen Committee hosted a cocktail and networking event at Osteria Via Stato: a special "Taste of Italy. Attendees enjoyed an epicurean journey highlighting the best of Italy its food, its wine, and its sense of la dolce vita. In addition to great networking, wine stewards led guests through impromptu wine tastings. There was something for everyone, an old school Italian ambience, scrumptious appetizers, and an assortment of delightful beverages. TMA Milwaukee Breakfast By Bill Farrar, Associated Bank The TMA Milwaukee Programs Committee held its networking breakfast on August 12 at the Hotel Metro. With nearly 50 attendees, the event provided great networking opportunity for one and all. Tony Laszewski, Waukesha State Bank, and Bill Gardner, Whyte Hirschboeck Dudek, each won $25 gift cards to Starbucks. The breakfast event is held the second Tuesday of every other month with the exception of December and is an excellent networking opportunity. Please join us for our final breakfast of the year on Tuesday, November 11 at the Hotel Metro. Erin Broderick and Angela Allen Peter Ivancevic and Jarrid Puzes James Clifton, Lisa Spigoda, Andrea Kindorf, and Keith Mait Photos by Cole Simon TMA Women s Group Brown Bag Luncheon By Tina Hughes, High Ridge Partners Inc. Candice Kline, Neema Thachet, Felicia Gerber Perlman, Daniella Levitt, Tina Hughes, Eileen Sethna, and Theresa Davis On August 14, the Women s Group held its second semi-annual Brown Bag Luncheon at the offices of Reed Smith LLP. The program was coordinated by Theresa Davis (Reed Smith LLP), Neema Thachet Varghese (Huron Business Advisory), Susan Duckett (Bibby Financial Services Midwest Inc.) and Tina Hughes (High Ridge Partners Inc.). The purpose of the Brown Bag Luncheon format is to encourage women to share their experiences in a friendly and supportive environment. The luncheon topic was Closing the Confidence Gap. Introductory remarks were shared by Daniella Levitt, President, Daniella Levitt Enterprises and Ovation Global Strategies. Levitt speaks and writes passionately about topics that she believes are core to women maximizing their career potential, including: taking risk, crossgenerational collaboration, power, being intentional, owning your story, your personal brand, your relationships, and your network. The event was attended by approximately 28 women seated at four individual tables to promote intimate and personal discussion on the topics of communication, envisioning, and power of the sword. Each table had discussion facilitators, including Davis, Varghese, Hughes, Felicia Gerber Perlman (Skadden Arps Slate Meagher & Flom LLP), Eileen Sethna (Chuhak & Tecson, PC), and Candice Kline (Sidley Austin LLP). The program emphasized that taking risk and portraying confidence requires an understanding not only of what we say but how we, as women, say it and how others perceive us. Levitt s comments were extremely insightful and inspired a deeper discussion and sharing of personal experiences to encourage personal and professional development. Photos by Bill Farrar August 2014 Page 6 Cathriona McGuire and Melissa Mickey Neema Thachet Theresa Davis and Peg Anderson Photos by Cole Simon August 2014 Page 7

5 PARALYMPICS Official Professional Services Sponsor Professional Services means audit, tax, consulting and financial advisory services. As used in this document, Deloitte means Deloitte Financial Advisory Services LLP and its affiliate, Deloitte Transactions and Business Analytics LLP. Deloitte Transactions and Business Analytics LLP is not a certified public accounting firm. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. Copyright 2014 Deloitte Development LLC. All rights reserved. 36 USC Member of Deloitte Touche Tohmatsu Limited First Business Capital Corp. FUELING EXPANSION, ACQUISITION, & TURNAROUND SOLUTIONS _Ball_Client_Use.indd 1 We are who you think we are And also, we re not Deloitte CRG delivers the critical knowledge and speed you might not expect from a big firm. Our focused teams are experienced. We work closely with you to assess needs and swiftly move your company forward. At the same time, we bring the full depth and breadth of Deloitte services to the table. For restructuring or performance improvement, it s the perfect balance. To learn more, contact deloittecrg@deloitte.com or visit We help highly leveraged companies make critical business transactions through innovative asset-based lending and factoring solutions. Specializing in small- and mid-market companies looking to borrow up to $10,000,000+, we offer exceptional service and valuable expertise. Call us today to learn more. 8/8/14 3:15 PM TMA Pro Bono Community Service Project a Great Success By Lou Marosi, Linkage Capital and Barb Yong, Goland & Christie LLP On a sunny Friday afternoon, with the Blue Angels flying in formation over our heads, more than a dozen TMA members, along with family and friends, came out for the Chapter s community service project on August 15 at Deborah s Place. Deborah s Place is Chicago s largest provider of supportive housing exclusively for women and is recognized as an innovative leader among homeless service providers locally and nationally. Volunteers worked on one of two projects. With the help of one of Deborah s Place s residents who is herself an unemployed carpenter, the crew built and painted two planter benches for residents to enjoy. Lou Marosi of Linkage Capital manned the table saw. Bruce Denby, Todd Bernier, and Brett Hrupek from The PrivateBank worked hard drilling, hammering, and building the benches. Donatella Savino of the Ettin Group and Tracy Steindel Ickes of Ginsberg Jacobs LLC took care of the staining and sanding. Lou Marosi s wife Kimberly, Barb Yong of Goland & Christie LLP along with her son, Jamie Yong, a sophomore at the University of Illinois in Urbana-Champaign, also helped with the project. Meanwhile, Kat Parker of HYPERAMS LLC, Evelyn Betrthold of MB Financial Bank, and Bernadette Barron of Barron Business Consulting worked with Chris Glatz, our Chapter Administrator, to clear and replant the flower beds. They were assisted by Jamie Cote of Madison Hawk and Past President Jim Shein along with his master gardener wife, Jane Shein, each of whom put their green thumbs to work transforming the exterior of Deborah s Place into a bright, colorful and inviting venue. The flowers were donated by Barb Yong and her law firm, Golan & Christie LLP. Many of the tools and supplies were generously donated by Linda Johnson, president and owner of the Village True Value Hardware store in Western Springs. And, when it became apparent that we needed another power drill for the planter bench project, Jim Shein immediately walked down the block to a local hardware store purchased the drill and when the project was done, he graciously left it behind for the Deborah s Place maintenance crew. After the hard work was done, volunteers were able to relax and enjoy some pub and grub at The Stop just down the street, making it a most enjoyable conclusion to a most productive day of volunteering. All that participated agreed it was a lot of work but it was fun, many new friendships were established and everyone walked away with a true sense of accomplishment and a warm feeling about giving back to the community. The Pro Bono Committee would like to thank Laurie Respass of Deborah s Place and Chris Glatz for their help in organizing the event, as well as all of the volunteers who participated in the project and so generously donated their time and talents to a worthwhile cause. Suggestions for future projects are definitely welcome. August 2014 Page 8 ASSET-BASED LENDING SOLUTIONS Lynn Wilson Charlotte Joe Cillian Cleveland Michael Doyle Denver Ralph Kourtjian Detroit Pete Lowney Madison Mike Colloton Milwaukee John Hoagberg Minneapolis Chuck Batson Madison President & CEO First Business Capital Corp. FACTORING SOLUTIONS Turnaround Financing Acquisitions Debt Restructuring Debtor-in-Possesion & Confirmation Financing Rapid or Seasonal Growth Gay Denny St. Louis Gail Heldke Chicago Division Manager First Business Factors ABOUT FIRST BUSINESS Do YOU Want to Get Involved? Contact one of our Steering Committee members on page 23 of this newsletter and you, too, can be a volunteer. With 15 committees to choose from, you'll find one you'll enjoy being a part of, meet new TMA Chicago/Midwest members to expand your personal network, and build your resume. Contact Chris Glatz at cglatzanagementservices.org today! August 2014 Page 9

6 CTP/CTA Lunch Shares Insights On Small Company Turnarounds By Kobus van der Zel, CTP, Global Turnarounds Inc. Some lunches are not only free, but worth years of experience in the turnaround trenches. This was the case at the most recent CTP/CTA lunch. During a lively discussion on September 9, the joint team from Neal, Gerber & Eisenberg LLP (NGE) and Rally Capital Services LLC (Rally) revealed some of the tactics, negotiation skills, and practical insights that were needed to perform the best small company turnaround in the nation in Host Nick Miller of NGE set the stage by discussing how client R & M Aviation Inc. d/b/a AeroCare Medical Transport Systems Inc. (AeroCare) was forced to file a free-fall petition for chapter 11 bankruptcy protection in March A series of aggressive actions by the secured creditor left us with no other choice, explained Miller as he talked about how the bank repossessed three of AeroCare s aircraft, sent letters to customers to divert receivables to a bank lockbox, and swept about $600,000 from the operating account. Dan Lee of Rally then reviewed how the team rejected and renegotiated certain burdensome leases, negotiated a salary concession from the owner, and created financial projections that showed that AeroCare could sustain operations on cash collateral alone. That was all we needed, Mark Berkoff of NGE emphasized, a positive cash flow plan, together with the ability to show that the bank had adequate protection. Berkoff continued to explain how he carefully evaluated his negotiation leverage on each of the main constituents in the case. I knew I had the bank s attention when I received a call late one Friday night, Berkoff added - a call that would lead to the start of a negotiated plan. After NGE secured court authority to use cash collateral and Rally stabilized operations, the team initially explored a potential plan involving a sale of the company, which outcome the bank favored. AeroCare retained an investment banker to market the company to prospective buyers, but the offers received were so low that the bank would have received a mere 25 percent recovery. The turnaround team would have to go back to the drawing board. This was one of several setbacks during the case that could have dramatically affected the end result. Other setbacks included lawsuits and opportunistic actions from competitors and suppliers, including an ex-employee who ran a competing business and sudden fuel and other vendor price increases. But the turnaround team persevered and focused on executing the operational turnaround plan. There was plenty of fat to cut, Lee noted. Rally consistently beat budget, which allowed AeroCare to operate profitably in chapter 11 without the need for any DIP financing and justified further extensions of the use of cash collateral. Lee explained that one key was moving the company s employees out of their silo mentalities by focusing on cross-functional business processes. Another important change was turning over the billing and accounts receivable process to a third-party billing company. This resulted in improved collections and cash flows for the company. After AeroCare s investment banker was unable to generate bids that reflected the true value of this increasingly profitable company, NGE proposed (and gained near-unanimous acceptance of) an alternative stand-alone plan of reorganization, which called for (i) the sale of the repossessed aircraft; (ii) an immediate downstroke to pay down the bank s secured claim; (iii) a restructuring of an aircraft loan with another lender; (iv) an immediate payment to unsecured creditors; and (v) additional payment to creditors over time. All other claims would be unimpaired and paid in full. This alternative represented a much better result all around, with unsecured creditors receiving approximately 15 percent and AeroCare s founder and owner retaining 100 percent of the equity. Although the conventional wisdom may be that it is not possible for a $16 million company to survive the chapter 11 process, the success of this case reminds us that turnaround teams can beat the odds. In March 2013, just one year after filing a free-fall chapter 11 case, the plan was confirmed with overwhelming support from all key creditor constituents. Berkoff described it best to the team during their closing dinner: If I had 100 cards with all the possible outcomes of this case and I threw them down a flight of stairs, the card that went the furthest was the one we got and that was the best possible card in the deck. Photos by Kobus van der Zel Visit us at quarles.com /quarlesandbrady Quarles & Brady has the focus and experience to deliver results to middle market clients. Clients rely on us to develop alternatives to traditional reorganization and liquidation options. We were among the founding members of TMA and remain active today. /quarlesandbrady For more information, contact Faye Feinstein at or faye.feinstein@quarles.com. /quarles-&-brady-llp ADVISORY VALUATION LIQUIDATION AUCTION CAPITALADVISORY VALUATION LIQUIDATION Retail Inventory Industrial Enterprise Real Estate Retail Inventory Industrial Enterp August 2014 Page 10 greatamerican.com ADVISORY VALUATION LIQUIDATION AUCTION CAPITAL Retail Inventory Industrial Enterprise Real Estate ADVISORY VALUATION LIQUIDATION AUCTION CAPITAL greatamerican.com GREAT Retail Inventory Industrial Enterprise Real Estate GREAT An international organization with locations across the greatamerican.com U.S. and around the world. An international organization with locations across the U.S. and around the world GREAT August 2014 Page 11

7 MARC Welcomes Top-Notch Speakers, International Crowd Carey Lohrenz Nina Easton On September 11 and 12 a large crowd gathered in Minneapolis for the annual MidAmerica Regional Conference and once again, the crowd was not disappointed. Outstanding educational sessions and great networking offered at a very affordable registration fee continue to make this conference the go-to event of the year for members and guests in the Midwest region and beyond. This year s event drew attendees from 13 different states (Illinois, Minnesota, Wisconsin, Michigan, Colorado, Delaware, Georgia, Kansas, North Carolina, New Jersey, New York, Pennsylvania, and Utah) as well as attendees from Canada! In addition to the five outstanding panels and two terrific networking receptions, two keynote speakers headlined the programming: Carey Lohrenz and Nina Easton. Ms. Lohrenz spoke of leadership and, well, grace under pressure to say the least. As the first female F-14 Tomcat Fighter Pilot in the U.S. Navy, Carey has flown missions worldwide as a combat-mission-ready United States Navy pilot. She is used to working in fast moving, dynamic environments, where inconsistent execution can generate catastrophic results and attendees got to see first-hand what she was referring to with some video clips of her experiences. At the conclusion of her address, the audience responded with a standing ovation and had a higher regard for the role she had serving our country as a fighter pilot. The following morning, Ms. Easton, FORTUNE s award-winning Washington columnist and senior editor-at-large, enlightened the audience with updates on the politics and economics occurring in the nation s capital. As a regular TV commentator on American politics, the global economy and foreign policy, Ms. Easton had great insights and generated a lively Q&A session at the conclusion of her remarks. As always, the conference cannot happen without the help of many volunteers from across the five participating chapters (Chicago/Midwest, Minnesota, Detroit/Grand Rapids, Ohio and Missouri) and the very generous sponsors (see below). Plans for a 2015 conference in Chicago will be kicking off in early January. Members are encouraged to get involved and participate on the planning committee. Meetings are typically held monthly via conference call and the four sub-committees are always looking for help. For more information on participating on the MARC planning committee, contact TMA Chicago/Midwest Chapter Executive, Chris Glatz. Thank you to our MARC2014 Sponsors: Platinum: Conway MacKenzie Inc., Dorsey & Whitney LLP, North Mill Capital, Ravinia Capital LLC, Shafer & Weiner PLLC Gold: Alliance Management, Associated Bank, Capitol Lien Records & Research Inc., Community Reinvestment Fund USA, First Business Capital Corporation, Lighthouse Management Group Inc., Lindquist & Vennum LLP, Manty & Associates P.A., Maynards Industries, MB Business Capital, NRC Realty & Capital Advisors, Plunkett Cooney, Wipfli LLP Special Event Sponsors: Barron Business Consulting, Chicago Capital Holdings LLC, Fredrikson & Byron P.A., Golan & Christie LLP, Great Lakes Business Credit LLC, Halpern Law Firm PLLC, Hilco Global, Huron Business Advisory, Marsh & McLennan Companies, Maslon Edelman Borman & Brand LLP, Schechter Dokken Kanter CPAs, Sugar Felsenthal Grais & Hammer LLP, Winthrop & Weinstine P.A. Wrapping Up the Detroit Bankruptcy Case Panelists included: Joel Schneider, Sharon Levine, Patrick Darby, Guarav Malhotra, and Glenn Kushiner View from Inside the Special Asset and Workout Groups panelists included: Ziad Amra, Alison Tregilgas, Kristine Netjes, and Michael Rosow Capital Markets Update panelists included: Tom Goldblatt, David Glickman, Tom Siska, Joe Fobbbe,and Jeff Arnesen The Art of Rainmaking panelists included: Susan Sneider, Van Conway, Aaron Hammer, Jack Butler, and Tim Becker T M A Nursery Sawyer Gordon Gouveia, son of member Gordon Gouveia Violet Louise Jaskiewicz, daughter of member Ryan Jaskiewicz Shortcuts, no. Results, yes. TMA Chicago/Midwest Past President Tom Pabst and President-Elect Aaron Hammer pose with the Stanley Cup at the Hockey Hall of Fame in Toronto, Canada, during TMA Global's The Annual. Baby Girl Miller, daughter of member Nicholas Miller When you pioneer an industry, you take special pride in staying at the top of it. For over 30 years, we ve put a premium on producing the kind of work that delivers better-than-expected results in faster-than-expected time. From turnaround and restructuring to enterprisewide value creation, we apply the same get it done mindset. Different? Absolutely. It s a difference that matters. August 2014 Page 12 U.S. Distressed Investing in China panelists included: Euan Rellie, Michael J. Small, Steve Jakubowski, Wayne Weitz, Rafael Zahralddin-Aravena,and Keith Maib Photos by Katie Worple Photography Enterprise Improvement Financial Advisory Services Information Management Services Leadership & Organizational Effectiveness Turnaround & Restructuring August 2014 Page 13

8 Why Branding Is an Integral Part of the Turnaround Process By Ilan Geva, Ilan Geva & Friends and Adjunct Professor of Branding, Graham School at the University of Chicago. Imagine you are working for, or with, Malaysia Airlines (MAS). You don t have to be the CEO, you don t have to be the CMO or the CFO. You might just be a sales person, flight attendant, supplier, pilot, engineer, whatever it is and at any level. How do you feel about yourself? Do you have a chance? Do you believe the boss will save the corporation or the brand? After all, we all know that Malaysia Airlines is not a company that can survive without a serious turnaround. Now imagine you are a passenger. Would you board the next Malaysia Airlines flight? I think we all know the probable answer. I chose this brand as an example for this article because it represents a very intriguing case: MAS is a government-owned entity, a National Airline MAS has been suffering from many financial issues in the past MAS has been in the news during 2014, for no fault of its own, but yet, with devastating consequences To begin with, Malaysia Airlines was already a company in trouble, including growing losses, growing debt, and a questionable business model. In addition came two disasters on an international scale within six months of each other the unexplained disappearance of MH370 in March and then the tragic shooting down of MH17 in July. Similar cases happened in the past with the bombing of PANAM flight 103 from London to New York on December 21, That event alone accelerated the demise of an iconic brand, PANAM. MAS is dealing with competition from low-cost regional airlines like Air Asia, Jetstar and Mallindo Air, as well as pressure from the highend prestigious airlines like Singapore Airlines, Emirates, Qatar Airlines, Etihad, and a few more. MAS is bleeding money in the last three years. The range of problematic issues goes further. MAS suffers from tense labor relations and bureaucratic management culture that objects to change within, despite more than $1 billion in government investment in the last decade. Add to the mix the fact that many future lawsuits are being planned, for damages in both tragic cases, and you get an astronomical financial burden that will not be covered in insurance compensation alone. Every way you look at it, MAS is in serious trouble and in this age of social media and 24/7 news, bad news and reputation spread faster than ever before. As a matter of fact, the public out there cares much less about the financial problems of MAS, it is all about the brand perception of the airline. Despite all these facts, the Malaysian government, signaling that MAS remained a strategic asset, announced that it would take control of the company through a stock buyback and restructure of its operations in an attempt to restore confidence in the troubled business. Sounds like the typical, traditional thinking of a turnaround process to me. One element of turnaround strategy will not be included, according the Malaysian government: it ruled out bankruptcy in part because Malaysia lacks bankruptcy laws like chapter 11 in the U.S. Chapter 11 allowed American carriers to restructure their operations, cancel contracts or rewrite labor relations, and find a way to merge with other airlines to rebuild their brands (Delta/Northwest, United/Continental, U.S. Airways/American Airlines) But the most fundamental turnaround element I did not hear about from the Malaysian government is the rebranding process of the airline. While it is true that turnaround considerations will have to be based on strengthening MAS' position domestically and in the region, including highly lucrative and competitive regional routes, rebranding and internal branding processes could help facilitate consumer response. Lets not forget that the traveling audience out there is not involved with the behind the scenes elements such as banks, attorneys, turnaround consultants, labor unions, and others. According to An Empirical Analysis of Customer Satisfaction in International Air Travel, Innovative Marketing, the consumer cares about: Timeliness: Delays have a lasting negative impact for passengers Assurance: A management committed to customer service and satisfaction Convenience: Convenient check-ins, departure and arrival times, and ticket reservations Helpfulness: An airline staff willing to meet requests and customer needs in a constructive manner Comfort: Having enough knee and legroom continued from page 14 The intangible asset called branding is all about the internal and the external building of the brand. Once one is neglected, it stands in harsh conflict with the other. They must be aligned and complement each other. From my experience, taking any organization through a complete internal turnaround process (also called change management) could have amazing positive results on the brand, the bottom line and the employee moral. Engaging employees and turning them into brand champions, is a great turnaround challenge. We all know that only 31 percent of global employees are fully engaged in their job. Nearly 1 in 5 (17 percent) are completely disengaged. They just show up for work. Any service-oriented business, such as an airline, should have an uncompromising philosophy of 100 percent engagement from all employees. They will support such airline in time of extreme distress, not abandon it. And I firmly believe that that would be a tremendous turnaround success. Not every business is in the same delicate spot MAS is. But many small, as well as large, businesses are either in the maturity stage, or the decline stage of their life cycle. They are all calling on us to give them advice and get them out of a dire situation. Many of us are doing an excellent turnaround job, but to the best of my knowledge not many are thinking of the full palette of turnaround services. To summarize, internal branding and external branding are an important tool in the turnaround arsenal. They are not just touchy, feely, warm & fuzzy useless methods. They are strategic assets that contribute real value to the brand equity. Any turnaround expert should consider partnering with, or offering, the branding process as part of the complete package of turnaround management. Meals: Satisfactory and free in-flight meals Safety and Security: Some people view boarding a plane as a life or death situation; employees should emphasize the safety features of their airlines It seems that a large portion of the turnaround efforts must focus on the above, in coordination with the rest of the financial efforts. Focusing only on the financial aspect is going to leave the traveling audience out of the loop, and they will continue to take their business elsewhere. And what about the extremely low morale among the employees? How can a financial/legal turnaround expert help the employees of MAS? I just heard MAS is about to reduce its work force by at least 25 percent because the flights are empty. Is that the real turnaround solution? continued on page 15 August 2014 Page 14 Like us on Facebook: August 2014 Page 15

9 From the Blog. Welcome The TMA Chicago/Midwest chapter is proud to maintain a blog that showcases the expertise of our members. Since its beginnings in 2011, the blog has grown into a robust platform for our members and serves as further testament to the capabilities of our chapter. To submit a post, please contact Erin Broderick at Erin.Broderick@ bakermckenzie.com A Distressed Business and The Five Stages of Grief by Dan Dooley, MorrisAnderson How a distressed business owner moves through the five stages of grief and how insolvency professionals can help When human beings are confronted with an emotional crisis that affects them very deeply, their reaction and the manner in which they deal with the crisis is, fairly obviously, emotional. Their ability to apply reason and analysis becomes greatly diminished until they adapt emotionally to the crisis. This is simply how I ve seen human beings behave, generally. So when an owner (or CEO) of a business is faced with a business crisis and that owner internalizes the crisis, his or her reaction is emotional and not analytical. Surprisingly, my experience is that there is little or no difference in that reaction whether the owner is an entrepreneur, in a family business or even a private equity principal. I say surprisingly because you would think that private equity investors who deal exclusively in money and investments would be a bit immune from the emotional aspect, but alas, they seem to react like all other owners in circumstances where they were effectively in charge of the company. The best insolvency professionals understand that the emotional and psychological stress that the owner faces when their business is in severe financial distress is much like the emotional stress that a parent feels when their child has a serious life threatening medical condition. When under severe emotional distress, people simply do not react and think logically. Therefore, insolvency professionals must utilize specific tactics to assist the owner and CEO to progress through the Five Stages of Grief (or loss) to allow for a much-improved reaction to the crisis. The Five Stages of Grief (or Loss) In 1969, Elisabeth Kubler-Ross published a book called On Death and Dying and in this book she proposed that there are five stages of normal grief. It is my contention that these five stages apply to any emotionally trying situation and severe financial distress of a business so near and dear to an owner's heart almost always fits that description. The five stages are listed below but they do not necessarily occur in the same order for every individual, but they typically occur as follows: 1. Denial 2. Anger 3. Bargaining 4. Depression 5. Acceptance Denial is simply an emotional defense mechanism that buffers a person against immediate shock. It s quite normal to rationalize and handle what feels like overwhelming emotional pressure. Often you hear experienced insolvency professionals bemoan the "denial" their prospective or new client has with phrases like "I can't understand why the owner is still in denial given the facts". This less-than-savvy opinion apparently assumes that the owner should be devoid of human emotions and react like the emotionless Spock in Star Trek. Simply put, denial is normal and should be expected. The best insolvency professionals realize this and work with the owner to move through denial to the next stage. Anger appears when the comforting buffer of denial starts to wear thin and emotional pain starts to kick in. The owner at this stage is easily angered and wants to blame anyone and everyone. In essence this is the blame anybody but me stage. Bargaining is the next stage where the owner will want to cut a deal with anyone to preserve the status quo. Bargaining occurs with other stakeholders, such as lenders, other owners, or even managers. I ve even seen distressed owners seek to cut a deal with God to postpone dealing with the financial distress. Depression is typically the fourth stage and at this time the owner is experiencing sadness and regret. The owner is now preparing to deal with his or her emotions and the business situation. Acceptance is the final stage and this stage is marked by an emotional withdrawal or detachment from the loss and a period of emotional calm. The owner is now able to, once again, think objectively and analytically. Although this stage is unlikely to be a happy one, it is a stage where the owner wants to move on and put the emotionally difficult event, like the financial distress of his business, behind him. The owner can now see the facts objectively. Applying the Five Stages of Grief or Loss to the Insolvency World The following are some rules I have found helpful when navigating financial distress situations. 1. Lamenting that the owner is in a stage of denial is futile and it is a worthless attempt to refute the human condition. 2. An owner's ability to accept the help of an insolvency professional and to deal objectively with difficult and serious business problems is a direct function of which of these five stages the owner is in currently. 3. In stages 1 and 2 - denial and anger - an owner is not ready to accept help. In stages 3 and 4 - bargaining and depression - an owner is generally willing to be led and accept help but he or she is not completely engaged in assisting with solutions. In stage 5 acceptance - an owner is not only willing to be led and accept help, but they are completely engaged in trying to address the issues and provide leadership. 4. An insolvency professional must consciously attempt to assist the owner in their progression through these five stages. 5. Note that all owners will not progress through each stage. Some owners will get stuck at one stage (usually the denial stage) and simply not progress any farther. In my experience the owners that get stuck in one stage and are unable to progress, tend to be extremely arrogant and will likely not accept help from anyone. 10 Steps to Help Your Owner Client Progress through the Five Stages 1. Your first days working with the owner should be purely fact finding and relationship building. 2. Resist the urge to shoot off your mouth early (even if you're right with your snap analysis) and you will better earn the trust of the owner. Trust is a big deal when helping an owner manage their emotions. 3. Relationship building requires a conscious effort to get to know the person and to spend some social time with them. It is important to learn how the financial distress issues will impact the owner (financially, family, legacy, legally, socially, etc.). This is helpful in forming future responses vis-a-vis the presentation of business solutions. 4. Identify who influences the owner (spouse, attorney, accountant) and meet with those people to get their perspective on the owner as a person and the business situation. 5. Sit down with owner one-on-one and provide him data analysis and write-ups on critical issues. Written documents have a much better chance of being understood and remembered than a verbal communication that can be more easily forgotten or remembered incorrectly. 6. When making recommendations on necessary actions, approach the discussion in a calm and objective manner. Do not respond to an emotional outburst by the owner with your own emotional outburst. Stay calm and collected. 7. Always be willing to modify your recommendations and work product to include the owner's input and tweaks as long as the key issues are still adequately addressed. Learn that getting 80 percent of what you want is a huge step forward and much better than holding out for 100 percent and ending up getting nothing accomplished. 8. Never view a discussion or debate with the owner on tactics and action items as a win/lose negotiation. 9. Understand that people process information in different ways and at different speeds. Some people process quickly and are impetuous and some process slowly and are very cautious. Understand what type of processor your owner is and manage accordingly. 10. Accept that you may need to be persistent on a key issue and go back to communicate the issue several times before the owner accepts the issue and able to address it. 11. (Bonus) Work to be truly empathetic with the owner on a personal basis. If you feel comfortable doing so, you may want to explain a personal crisis that you endured. My experience is that this sharing of a difficult emotional issue often makes it easier for the owner to open up more to you. Final Thoughts I've been doing insolvency consulting for more than 20 years. People often call our line of work "Financial Advisory or FA" work. It's true that FA work uses the basic skills and tools of cash flow, earnings/ EBITDA, valuations, etc. These basic skills and tools are classic left brain analytical type skills. However, the higher level FA skill is managing expectations and personalities of owners and every other stakeholder. The soft side of reading the room and dealing with the people and personalities are classic, right brain people skills. To be in the Best Insolvency Professional group you have to progress beyond the basic left brain analytical skills into the right brain people skills. And to be most effective with your owner clients, you must understand the Five Stages of Grief (or loss) and actively work to progress your clients through the stages as fast as possible. Only then can you help them work their way out of severe financial distress, which is the source of their emotional distress. About the Author Dan Dooley is Principal and CEO at MorrisAnderson and can be reached at ddooley@morrisanderson.com August 2014 Page 16 August 2014 Page 17