Introduction from EACTP President, Alan Tilley
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In line with our policy of “Giving voice to Turnaround Professionals” we are introducing this Newsletter to be published three times a year to coincide with the East Europe Conference this March (now postponed, see 'Events' section below), the TMA Europe Madrid conference in June and the UK and German TMA Chapters’ November conferences.
Each edition will have a guest editor. Our thanks to Volker Beissenhirtz for editing this first edition. And thanks also to the contributors. EACTP is an organisation that relies heavily on the pro bono efforts of its members. And our membership is not only generous with its time but also holds strong views on the benefits of value preserving turnaround. Accordingly, please feel free to add your voice to turnaround by offering to contribute an article of interest on issues and achievements, or better still offer to be a guest editor by contacting Helen Lindop
at
eactp@turnaround.org
.
As you receive this Newsletter you will be pleased to know that progress is underway with Leiden University as faculty to introduce examinations this year. From that time entry to membership will be by examination success only. So, any practitioner who has allowed membership to lapse or any practitioner wishing to enter EACTP membership under the current case submission and references basis has a limited time scale to act.
With the credibility that Leiden University’s academic reputation brings, EACTP will be well placed to train young professional aspiring to turnaround as a profession and add status to all members at a time when legislation change across the continent is recognising the importance of our profession in preserving value in distressed businesses.
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Introduction from our guest editor, Dr Volker Beissenhirtz
It’s getting serious – and I am not only talking of the coronavirus.
But first things first: Despite all the ongoing gossip, the coronavirus only “serves as a catalyst for companies already struggling with problems” as the German journal “
Wirtschaftswoche
” aptly puts it.
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The global economy was indeed not really in an expansionary mode at the end of 2019, to put it mildly. Hence, the virus only exacerbates existing problems and adds another layer of issues to it. As will other crisis – the probable next refugee crisis and the negotiations for a trade deal after the Brexit, to name but two. Hence, it is obvious that 2020 will not be a year easy to navigate through. The first insolvencies of travel companies and the struggling of airlines and the aircraft industry are vivid indications of the issues to come.
Secondly, and on a more upbeat note, EACTP is getting serious now, too. “Just in time” so to say to substantially help companies in distress, EACTP will – with the help of Leiden University – begin to roll out the long awaited examination process this year. With a view to the coming national implementation of the EU’s “Preventive Restructuring Mechanism”, this qualification will be able to considerably raise standards in any future restructuring wave. Accordingly, we will closely monitor the respective national discussions and measures – starting with the current status in Germany.
In another article, Tyrone Courtman focusses on the “human factor” within a turnaround. The “psychology of turnaround” is an often underestimated issue – especially in the situation of multiple incertitudes, as we are now in. leaders and teams should not estimate the pitfalls in this area. This newsletter concludes with an article of Francesco Liistro on “Creating Value with Operational Intervention”, the very core of EACTP.
As editor of this issue I wish you a delightful reading.
Keep calm and carry on!
Volker Beissenhirtz
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EU: “Preventive Restructuring Mechanism” – implementation in Germany by
Dr Volker Beissenhirtz
The deadline for the European legislators to implement the EU “Restructuring Directive” is set for the 17 July 2021. However, The German Ministry of Justice will most probably publish the (German) draft bill which shall also take into account the consequences of the evaluation of the former reform of the German Insolvency Act (“
Insolvenzordnung, InsO
”), in the spring of 2020. Meanwhile, however, various professional associations have been very active and have, in some cases, developed concrete proposals as to how they believe the implementation into German law should take place. In the following, the timetable for implementation and the key points of the various position papers are outlined.
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Human Factors: The dangers of ‘Confirmation Bias’ by Tyrone Courtman
Some of you may be aware that I have a passion for all thing’s aviation, which stems from my childhood dream to become an airline pilot…. That was until I saw the light, qualified as a Chartered Accountant and became an expert in Financial Distress and Corporate Restructuring!... but my interest remains.
One of the more sobering aspects of that interest is the detailed review of reports provided by the UK’s Air Accident Investigation Branch (AAIB), which often analyses the sequence of events culminating in an air accident. Their purpose is simple. To share their professional analysis and conclusions reached, in the hope that the causal factors which led to the accident can in the future be avoided. One of the common themes in Pilots decision making is confirmation bias and I think there are many parallels, and lessons to be learnt, which can readily translate into the world of Business and management teams in crisis.
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Creating Value with Operational Intervention by Francesco Liistro
Private equity has gotten a bad rap throughout the years, thanks in part to the popular image of an uncaring operator who buys and sells companies without concern. For a truly successful modern PE company that accomplishes high multiples through attention and care, that couldn’t be further from the truth.
In practice, a great private equity fund is one that meets investor needs with a full appreciation and understanding of what makes these companies tick. Portfolio company CEOs make a choice. You can be remote and uncaring, buying and selling without true involvement in the day-to-day and hope your changes work. Or you can roll up your sleeves and do the work necessary to create real benefits. That’s more than opening up the hood and taking a look around; it’s a deep dive into a portfolio company’s everyday workings. It’s a process known as operational intervention.
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Events
CANCELLED:
TMA Europe East European Conference, Prague
This conference, which was scheduled for 12 March, will be rescheduled for later in the year due to the Coronavirus.
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TMA Europe 2020 Annual European Conference
Madrid 18-19 June 2020
Please remember to add the pre-conference dinner if you plan to attend.
There is an EACTP member discount for the conference.
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News for Members
LinkedIn
Please remember to add your EACTP membership to your LinkedIn profile, and follow the EACTP
LinkedIn Page
.
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Copyright © 2020 European Association of Certified Turnaround Professionals, All rights reserved. You are receiving this email because you are a member of the EACTP.
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