Message from the President
John Dimovski, TMA Detroit Chapter President
    
How quickly the year has passed! When I took over as chapter President about a year ago, I recall thinking about how daunting of a task this would be and the shoes that I would have to fill of all the great leaders our chapter has had over the years.  I am truly honored to have put my name on that list with such talented and respected people in our industry. It has also been an absolute privilege to have served as a board member of this fine organization over the past 6 years.   Our Detroit board has been comprised of individuals who are committed and dedicated to this organization and its members.  As a result, so much positive change has been effected and growth for the chapter has been accomplished. Serving on this board has positively impacted me in many ways, both personally and professionally, so I strongly encourage those of you who have not been involved to consider doing so. I assure you that you won't regret it!
 
One of my favorite experiences as President has been working with the various local charitable organizations in order to give back and support those in our community. I am excited to announce that our 21st Annual Golf Outing on June 18, 2018 will be for the benefit of the Kids Kicking Cancer organization and that all profits from this event will go to the organization. Kids Kicking Cancer is a non-profit organization which provides therapeutic martial arts classes and hospital visits for children and teens. Their mission is to ease the pain of very sick children while empowering them to heal physically, spiritually and emotionally.  Through an innovative program that merges modern integrative medicine with traditional martial arts, Kids Kicking Cancer addresses the overwhelming needs of children with illness. Specially trained black belt martial artists teach breathing, visualization, and relaxation techniques, in addition to traditional martial arts moves to help empower the children and provide them with a sense of power, peace and purpose.   Whether you are a golfer or not, I would ask all of you to please join us at this event as you will not only be helping these children, but you will witness a special performance that has been prepared for our members by children from the program.  You can learn more about Kids Kicking Cancer at www.kidskickingcancer.org/
 
We also have a number of other great programming events scheduled for this summer and fall.  For those of you who are soccer (or futbol) fans, please join us on July 10th for our first ever visit to Keyworth Stadium in Hamtramck for a Detroit City FC match against Club Necaxa.  On July 26th, the NextGen group will be hosting its 5th annual Summer Soiree with ACG and RMA at Vinotecca in Birmingham.  NextGen will again be hosting its annual Awards Program on August 16th at the Detroit Athletic Club.  Finally, on September 13th, we will host our Fall Kickoff event at the Birmingham Country Club.
 
As my presidency comes to an end, I can assure you that you the chapter is in great hands and will continue to flourish going forward.   I am proud to announce that Brendan Best of Varnum Law will assume the presidency of our chapter on July 1. 
 
Again, I encourage all of you to consider getting involved with our local chapter as we are seeking volunteers for our various committees, especially with Programming and Membership. If you are interested please contact Brendan Best at bgbest@varnumlaw.com or Sharon Kimble at  skimble@turnaround.org .
 
Finally, I want to send a special thanks to our Immediate Past President, Jason Bank, who has helped guide me through this journey over the past year.  I hope all of you enjoy your summer and I look forward to seeing everyone at our upcoming events.
 
Thank you for your support!
 
John Dimovski
President - Detroit Chapter

Where Are We In The Credit Cycle?
By John L. Klehm

It's confusing. News on credit trends comes out in dribs and drabs, sometimes indicating a turn in the credit cycle, other times showing that all is well. The data points are scattered and open to interpretation. From a high level, people can read into the information what they want to see. Those with a favorable view on the overall economy and credit quality see data that confirms that position. For those looking for reasons to think recent deterioration in some types of loans is an indication of a larger trend, there is data that supports that view. So how are different types of loan portfolios performing and do they provide insight on where are we in the credit cycle?
 
Some types of loan portfolios are performing very well, while others are starting to show clear signs of distress.
 
Home Mortgages:
The delinquency rate on residential home loans continues to decline, though it remains at a higher level than in the 1990s and early 2000s. Per reports published by the St. Louis District of the Federal Reserve, non-performers peaked at 13% in 2010 and have since declined to around 4% today, though still higher than 1.5-2.5% for most of the prior couple decades.
 
Credit Cards:
Credit card delinquencies are rising. As of Q4 2017, 1.86% of accounts were 90 days past due. That's up 27% from 2014 but below the 2009 high of 2.97%. Transunion forecasts this to rise further to 1.96% by the end of 2018. Many in the credit card industry think the credit cycle has peaked and lenders are adding to loan loss reserves.
 
Ag Loans:
Delinquent agricultural loans have roughly doubled in the past three years. Overall levels are still low, but are clearly climbing. Farmers have struggled with low crop prices, borrowing against their land equity to stay in business. Ag banks have been funding farmer losses for several years and that practice appears to be ending. According to a recent article in the Farm Journal, ag bankers are tightening lending requirements.
 
CRE Loans:
Commercial real estate lending is the strongest asset class. Non-performing loans are well below that of the even the go-go years of the mid-2000s. No signs of credit deterioration.
 
Auto Loans:
Default rates are rising, but deterioration appears to be concentrated in lower quality paper. Overall delinquencies were 1.47% at the end of 2017, up 20% from 2014. That said, subprime auto defaults have skyrocketed and are currently HIGHER than the financial crisis years of 2008-2010. The size and magnitude of the subprime defaults has driven some subprime lenders out of business and others to raise credit standards. It isn't clear if the poor performance of subprime auto portfolios has to do with lax underwriting or if it is an indicator of larger credit trends.
 
C&I Loans:
Non-performing C&I declined from 2009 to what appears to be the low for this cycle in 2014. Since then, according to Fed data, classified loans have almost doubled. That said, much of the increase came in 2016 with the collapse in energy prices resulting in a bulge in defaulting oil and gas loans. While it might be a little early to be definitive, it appears that the future trend in defaulting C&I loans is higher.
 
Conclusion:
Overall, loan quality remains quite good. The best performing groups are residential and commercial real estate loans. Significant deterioration is evident, however in Ag, credit cards and subprime auto. The credit cycle in those segments would appear to have turned. C&I is showing some signs of cracking but will have to be monitored over the next few quarters to confirm that a trend toward more non-performing C&I loans is on the way. 

Managing Happiness 
by Julie Cotant

Throughout your life, you will spend at least 90,000 hours in the workplace. (I suspect this number is significantly higher for the population reading this article.) How happy are you during those 90,000-plus hours? If you would describe yourself as totally, genuinely happy (one of a privileged few), stop reading this article. Keep doing your thing.
 
Now that it's down to the rest of us, I can be honest with you: You are being outperformed by the people who just stopped reading. Happy people are more productive and creative, procrastinate less, and are better at complex thought analysis. They have higher incomes, higher sales, and stay in their jobs longer. They live longer, experience less stress, are less likely to burn out, take fewer sick days, and have stronger immune systems. In fact, happy people outperform their peers in nearly every metric science can measure. And, how do we know this? There is a science of happiness, known in academia as positive psychology. 
 
Positive psychology has not merely helped identify the characteristics of happy people. It has done something far more valuable: positive psychology says that you, too, can be happy. The science robustly supports that happiness is a skill that can be learned. 
 
First, let's be clear about what makes us happy and what doesn't. That promotion you're gunning for? That client you just have to land? The car you so desperately need? Those may bring a little bit of happiness for a short amount of time, but eventually, we get used to the acquisition; it becomes part of the scenery. Within 6 months or less, our happiness level returns to our baseline. This is true for both "positive" (e.g., winning the lottery) and "negative" (e.g., major injury or illness) events.
 
To sustainably and effectively raise our happiness level, we must engage in regular voluntary behaviors that cannot escape our attention. It won't surprise you to learn that exercise is one of those activities. You cannot forget you are exercising or get used to it in the way you might get used to driving a Bentley. Exercising has a positive impact each time you do it. Here are a couple more activities supported by scientific research that positively impact our happiness:
 
Find a friend
Having meaningful social connections is one of the strongest predictors of human well-being and happiness. According to Gallup research, having a best friend at work is one of the strongest predictors of productivity and leads to better performance. Those with close work friends expend more effort and are more engaged at work than their peers. So, take an hour to grab lunch with a coworker. Spend five minutes talking to a peer over your morning coffee. Schedule a regular happy hour. Your performance and happiness will benefit.
 
Look for the good
It may sound trite or too minor to make an impact, but taking notice of the good things that happen to you has been shown to boost your happiness. Our brains are biologically designed to look for the threats in our environment, which predisposes us to better notice the things that are going wrong rather than what's going well. To counteract this, take ten minutes each day to write down the good things that are going on around you. This will help you to savor the positive things that happen and help you engage in the good things more fully. Remembering them also positively impacts your mood and fosters a sense of gratitude.
 
Happiness may not be on the other side of your next success, but your next success could be on the other side of happiness.
 
Julie Cotant is a licensed attorney and corporate happiness consultant. She helps businesses improve employee performance and engagement by teaching science-based tools that cultivate individual happiness. Contact Julie at julie@higherelevationgroup.com 

Membership Spotlight 
Amanda Vintevoghel, The Dragich Law Firm


Q:   How did you get into turnaround/restructuring work?
 
A:  While in law school at University of Detroit-Mercy, I started clerking for The Dragich Law Firm PLLC (f/k/a Harrington Dragich PLLC) which specialized in bankruptcy and restructuring work.  I really enjoyed the work and it fit well with my undergraduate degree in business management.  I've been working with Dave Dragich ever since.
 
Q:  Is there a particular sub-area that you specialize in or prefer? 
 
A:  I prefer the negotiations and transactional side of the practice over the litigation side.  I really enjoy the hands-on side of the transaction practice - getting to work directly with the clients as they navigate difficult business issues.
 
Q: What have been some of your most gratifying or favorite engagements?
 
A: We represented the former CEO of a large solar energy company in a preference/fraudulent conveyance action related to severance payments he received. That engagement was particularly gratifying because of the great result we got for our client - I really felt like the good guy prevailed in that one and that was an excellent feeling.
 
Q:  How did you get involved with TMA?   What role has your TMA membership played in your career?
 
A: When I was in law school, I took a bankruptcy class and Gene Kohut was the professor.  Gene encouraged me to attend the TMA Annual Conference at the DAC that year.  Steve Wybo was paired with me as a conference mentor and introduced me to a number of professionals at that conference, including John Dimovski who was starting the TMA NextGen group at that time.  I continued to be involved as I started my career, particularly with the NextGen group.  I was the President of NextGen last year and just completed my first full year on the TMA Board co-chairing the TMA Network of Women. I am naturally an introvert, but TMA has really helped me be more comfortable in networking environments and grow my network of contacts.
 
Q:  What advice would you have for someone who is new to the industry or is thinking about getting into the industry?
 
A:  Get involved in an industry organization, meet people and don't be afraid of learning new things.  I've learned so much through my involvement in TMA, particularly with respect to what different turnaround professionals can do for their clients.  I also found the NextGen group to be a great segue into the industry and a great network of young professionals who can relate to each other and the challenges we face as relative newcomers in our chosen fields.
 
Q:  What do you like to do outside the office?
 
A: I'm an avid runner.  Running is my version of meditation - I enjoy the time to myself and it recharges my batteries.  I also coach basketball and bowling for the Grosse Pointe/Harper Woods Special Olympics team, which is tremendously rewarding.  Finally, I love to travel - I'm heading to Paris and Greece this summer and I really looking forward to that trip!

Membership Spotlight 
Chuck Mouranie, EDSI Consulting


Q:  How did you get into turnaround/restructuring work?
 
A:  I was working as an executive at Chrysler when it merged with Daimler.  On my way to Germany as part of the integration team, I learned quickly that the merger was not going to be a merger of equals and I started looking for new opportunities.  Shortly thereafter, I started talking with a supplier I had worked with at Chrysler that needed help turning around it operations.  I decided to form my own turnaround/operational improvement consulting firm that day and have never looked back.
 
Q:  Is that a particular sub are that you specialize in or prefer?
 
A:  I have a Six-Sigma Black Belt so I've always been interested in operational improvement but really I think of myself as a jack of all trades. I focus on debtor-side engagements, as a financial advisor and advocate for the debtor, focused on improving operations, turning around businesses and saving jobs.
 
Q: What have been some of your most gratifying or favorite engagements?
 
A: I really don't have a favorite as I cherish the relationships that I've built with my clients over the years and that I have become a trusted advisor to them and to their businesses. In terms of gratifying engagements, my team worked with a molding company that was losing about $6 million a month.  We were able to turn that company around within 12 months while positively impacting the business and saving jobs in this community.  
 
Q:  How did you get involved with TMA? 
 
A:  I got involved with TMA after starting my consulting practice.  I was looking to network with other turnaround professionals and learn more, not just about the financial aspects of the practice but also the legal.  
 
Q:  What role has your TMA membership played in your career?
 
A:  In 2000, I met someone with a Certified Turnaround Professional ("CTP") certification offered by TMA.  I saw the value in that certification and how it would help me take my practice to the next level.  After I obtained my CTP certification I got more involved with the Detroit chapter.  I've been on the board now for 2 years and this year I am the co-chair of the Charitable Giving Committee and chair of the Education Committee.  Most recently, I've been leading the charge with our annual Golf Outing, including identifying and coordinating with our charity, Kids Kicking Cancer.
 
Q:  What advice would you have for someone who is new to the industry or is thinking about getting into the industry?
 
A:  TMA can provide you with access and exposure to the best and brightest in our industry.  Use the skills you were given as a child, primarily, listen.  Be a sponge - absorb and learn something new every day.
 
Q:  What do you like to do outside the office?
 
A: I love playing ice hockey and have been playing since I was 4 or 5 years old.  I also love to golf and be out on my boat.  

March 21 - Forum Shopping in Bankruptcy - Time For Reform?  Event: Chief Judge Phillip Sheerly, Robert Weisberg and David Dragich
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Upcoming Events

June 18
Annual Golf Outing
Wabeek Country Club, Bloomfield Hills

July 10
Detroit City FC vs. Club Necaxa
Key worth Stadium, Hamtramck

July 18
Network of Women Garden Party
Farmington

July 26
nextGen Summer Soiree
Vinotecca, Birmingham

August 16
nextGen Awards
Detroit Athletic Club, Detroit

September 13
Fall Kick-off
Birmingham Country Club, Birmingham


Please visit our website for more information and to register for these and other events.


Board of Directors |  2017-2018

John Dimovski, President
Harmon Partners

Brendan Best, President-Elect
Varnum LLP

Jason Bank, Immediate Past President
Kerr, Russell and Weber, PLC

Allison Bach, Director
Dickinson Wright

Matt Dekutoski, Treasurer
Crestmark Bank

Laura Eisele, Director
Laura J. Eisele PLC
  
Mike Hausman, Director
Conway MacKenzie

Russ Long, Director
O'Keefe
  
Chuck  Mouranie , Director
EDSI Consulting

Eric Novetsky, Director
Jaffe Raitt Heuer & Weiss, P.C.

Ted Sylwestrzak, Director
Dickinson Wright

Amanda Vintevoghel, Director
The Dragich Law Firm PLLC
  
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Honigman

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Ernst & Young

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Chapter Contact
Sharon Kimble
Executive Director
734.757.4689