Job Opportunities Exist for Turnaround Specialists
General Growth Properties Inc. recently filed the biggest real estate bankruptcy in U.S. history after amassing $27 billion in debt during an acquisition spree, according to Bloomberg. The report states the owner of Boston’s Faneuil Hall and the South Street Seaport in New York City has ended its seven-month effort to refinance its debt. The company listed $29.5 billion in assets and debts of about $27.3 billion in the Chapter 11 filing. Bloomberg notes that General Growth will continue operating its more than 200 properties. The report quotes General Growth President, Thomas Nolan, as saying, “We intend to emerge as a leaner company. We want to come out as a less leveraged company. Our business model remains strong.”
Marcia Goldstein of Weil Gotshal & Manges LLP and James Sprayregen of Kirkland & Ellis LLP will represent General Growth in bankruptcy, according to Bloomberg. The company also hired turnaround firm AlixPartners LLP and investment bank Miller Buckfire & Co.
AbitibiBowater Inc., North America’s biggest newsprint maker, has also sought bankruptcy protection after U.S. lenders refused to accept a proposed debt restructuring, according to Bloomberg. The report reveals that AbitibiBowater had assets of $9.9 billion and debt of $8.78 billion on Sept. 30, citing a Chapter 11 petition recently filed in U.S. Bankruptcy Court in Wilmington, Delaware. Thirty-one affiliates also entered bankruptcy.
Bloomberg quotes AbitibiBowater’s CEO, David Paterson, as saying, “Today’s announced decisions ensure business continuity for AbitibiBowater and were made only after all other viable options to recapitalize our long-term debt were exhausted.”
The General Growth Properties and AbitibiBowater filings are just two examples in a recent slew of corporate bankruptcies. In fact, business bankruptcies recorded the sharpest percentage increase in 2008 with 43,546 business filings - a staggering 54% jump from the 28,322 filings in 2007 (the highest in a decade), according to the American Bankruptcy Institute (ABI). Moreover, business filings, which totaled 12,901 for the fourth calendar quarter of 2008, represented a 62% increase from the 7,985 filed in the same 3-month period in 2007, notes ABI.
Meanwhile, total bankruptcy filings in the U.S. increased 31% in 2008 over calendar year 2007, according to ABI, citing data released from the Administrative Office of the U.S. Courts (AOUSC). Bankruptcy filings totaled 1,117,771 for the 12-month period ending Dec. 31, 2008, a significant increase over the previous year’s total of 850,912.
The stark figures confirm a bleak picture, according to ABI Executive Director Samuel J. Gerdano. “Bankruptcies are on the rise, and will continue to spike upward in 2009. We expect filings to reach 1.4 million or even more this year,” says Gerdano.
Now, amid the bankruptcy boom and surge in corporate defaults, hiring among turnaround and restructuring shops remains robust, according to the WSJ. But it’s not just about bankruptcy. Many companies are seeking out of court restructurings, including bank covenant relief. As a result, turnaround specialists have their hands full when it comes to advising troubled companies.
Executive search firm, A.E. Feldman, is already seeing a rise in demand for candidates with expertise in bankruptcy, crisis management, restructuring and valuation. A.E. Feldman’s CEO, Carol Schwam, says that right now job opportunities exist for turnaround specialists with a CPA, CIRA, CTP or CFA at both accounting and financial advisory firms. One industry veteran recruiting for A.E. Feldman also notes that experience is essential. Restructurings, bankruptcy and debtor in possession (DIP) financings are very expertise-driven.
Are you working in restructurings, DIP financings or bankruptcy? If you want to grow your career or discuss your firm’s talent needs, contact A.E. Feldman’s President, Mitch Feldman today.
