2019 WINTER MEMBER NEWSLETTER
Message from the President
Amanda Vintevoghel, TMA Detroit Chapter President
    
Amanda Vintevoghel
J ust like that - the holidays are here!  The last few months have been a whirlwind to say the least and we've had some great events since our last newsletter. The Kick-Off party celebrating the 25th Anniversary of the Detroit TMA Chapter was a huge success, even though the weather did not cooperate and forced the festivities indoors.  The cocktail event at The Oakland Art Novelty was also a successful event. Several of our members came out to enjoy one of kind cocktails and the speakeasy atmosphere.  Finally, the TMA NOW hosted their annual luncheon event at the Townsend with a panel that discussed the hottest topic in restructuring right now - receivership. The TMA NOW panelists shared their expertise and war stories to one of the largest luncheon crowds to date, comprised of both TMA members and non-members.

Right around the corner is the TMA Annual Holiday Party on December 4 at the Detroit Golf Club. We are excited to add a little variety to our repertoire by hosting at a new location, as well as supporting a new charity, Crossroads of Michigan. Crossroads of Michigan is a social service outreach agency with two locations in Detroit and provides emergency assistance, advocacy, and counseling to anyone in need. We encourage our members to consider donating to this charity. Additionally, this year we are looking to expand our membership, and as a result, any TMA Member that brings a potential new member, that TMA Member's registration is free!

Also, as many of you are aware, we are currently accepting sponsorships for our 2020 calendar year. This year we have three levels - Gold ($5,000), Silver ($3,000), and Bronze ($1,500). Each level provides a unique opportunity to expand your marketing with our local industry leaders. Please feel free to contact me to discuss these opportunities further.

Finally, as a reminder, the Detroit Chapter is also hosting the 2020 TMA Mid-American Restructuring Conference at the Westin Buick Cadillac Hotel in April. Opportunities are abound to sponsor, speak, network, or all of the above with other TMA chapters from the Midwest! Please see the details on how to take advantage of this years' MARC below.

I wish everyone the best this holiday season and look forward to all 2020 has to bring!

Amanda Vintevoghel
President - Detroit Chapter
First Business
HOW SMART BUSINESS EXECUTIVES USE DEBT INTELLIGENTLY

Getting a business loan is a big decision that's not comfortable for everyone. It's completely natural to want to avoid debt at all costs, both in your personal finances and when managing a business. From another angle, you can look at debt as a tool that can leave borrowers better off than they were before. That's true with personal debt solutions like mortgages and with the right business loan.

BUSINESS DEBT AS A GROWTH TOOL

Businesses exist primarily to make money, of course, but no one has ever managed to generate cash out of thin air. Business owners need some capital to invest in location, expansion, hiring, and customer outreach efforts. Besides simply earning more revenue, a business has two general options to raise the necessary funds for these big-ticket projects: debt financing and equity financing.

Large corporations often obtain financing through debt and equity simultaneously. However, equity comes at a higher cost for small and midsize businesses and is less accessible. Whether you're taking investments from your Uncle Larry or a group of investors, equity financing means you're diluting your ownership and, ultimately, control of your business, and its future profits.

So why do small businesses choose debt? There are a few key reasons:
  • Easy planning. Borrowers can easily plan for the cost of a loan. Under a basic, fixed-rate loan, business owners know exactly how much they will owe over a specific timeframe, simplifying budgeting and forecasting.
  • Less uncertainty. The risks of debt to both the borrower and the lender involve less uncertainty than equity financing.
  • Financial benefits. Along with giving up ownership stake in your company, equity financing can be more expensive for owners than a business loan. Investors expect a reasonable return on investment that, in most cases, will be higher than the cost of bank loan financing. Many business owners don't think about it that way - they react to the interest rate of the loan. However, investors likely expect 15% return through profits and dividend distributions.
  • Growth flexibility. You likely have specific goals, and structuring your debt correctly is key to achieving them. By acquiring another business with an SBA loan or adding equipment through an equipment lease or loan, for instance, you can take advantage of creative terms and financing that best suits your business.
  • Contingency planning. Even if your business is currently in a high-growth phase, building a relationship with the right financial services firm gives you peace of mind with easy access to turnaround services like asset-based lending and cash-flow solutions like accounts receivable financing.
  • Building business credit. Just like building personal credit as you grew into adulthood, your business benefits from a trustworthy record of debt repayment. According to a National Small Business Association survey, 20 percent of small business loans are denied due to business credit.
KEYS TO THE RIGHT BUSINESS LOAN

If they decide to get a business loan, owners and executives have plenty of options at their disposal, but credit requirements, loan terms, repayment plans, and more can all differ widely from one loan to another. Finding the best lender and putting that money to work is a challenge all its own.

In the search for the best debt financing plan for your business, pay attention to lenders that emphasize a more personalized, one-to-one approach. Financial institutions offering business loans are numerous, but only a select few can offer the terms your business can manage combined with the level of service you deserve. A long-term, trusting relationship with a financial services partner is a competitive advantage. Along with financing options to meet your current business needs, you'll benefit from inside industry connections, specialty finance options such as  equipment financing accounts receivable financing  and  asset-based lending , and even  private wealth services  like business succession, and  trust and estate  capabilities.

In addition to putting quality first, it's important to understand how loan terms are structured to meet the needs of your business along with the financial metrics that will govern repayment. The right debt financing options for any organization are those that work within their individual revenue cycle and its asset structure. Never sign anything you're not comfortable with - ideally your lender should spend the extra time to make sure you understand all the terms and paperwork.

Debt is not just about your bottom line now, but propelling your company to a strategic advantage for a profitable future. In our current competitive business landscape, it's important to use all the tools at your disposal to position your business, including forging a connection with a reputable, responsive financial services firm that can help with niche business financial solutions.

Does the WARN Act Apply in Receivership Proceedings?
 By David Dragich, The Dragich Law Firm PLLC   
The U.S. economy is in the midst of a record economic expansion but signs, from slowing manufacturing numbers to weakness in formerly high-flying housing markets, suggest we may be in the tail-end of growth. In times of distress, troubled companies and their secured lenders start to evaluate options. Chapter 11 bankruptcy reorganization, or Chapter 7 bankruptcy liquidation, are common processes that are used to address distressed business situations. An often overlooked solution is utilizing a state or federal court receivership.
 
State and federal court receiverships involve the court appointment of a receiver to oversee and, in most cases, operate a business. A receiver is a neutral and independent third party appointed to act on behalf, and for the benefit, of all interested parties. Receiverships are often sought by secured lenders as a bankruptcy alternative because it's typically a faster and less costly process.
 
A receiver's duties and responsibilities, such as monetizing assets and distributing funds, are outlined in an order entered by the court overseeing the receivership. Because receiverships typically involve a sale or a liquidation of the business, one of the issues that a receiver and its legal counsel must address is the reduction of the business' workforce. And whenever a significant layoff of employees takes place, a key legal issue that must be considered is the potential implication of the Worker Adjustment and Retraining Notification ("WARN") Act, 29 U.S.C. § 2101-2109.
 
A Brief Explanation of the WARN Act
The WARN Act, subject to certain exceptions, requires employers with 100 or more employees to provide employees, bargaining representatives of the employees (unions), and specific government agencies at least 60-days' notice of any plant closing and mass layoff.
 
The notice procedures prescribed by the WARN Act are meant to give workers transition time to prepare for the loss of employment, to seek new work, and, if necessary, to seek training in a new skill or retraining in an existing skill that will allow them to obtain replacement work.
 
Failing to abide by the WARN Act can have serious consequences. The statute provides that an employer who orders a plant closing or mass layoff without providing WARN Act notice is liable to each unnotified employee for back pay and benefits for up to 60 days during which the employer is in violation of the WARN Act. In addition, if an employer fails to provide notice to the relevant local government, it can be liable for a civil penalty of up to $500 for each day the employer is in violation of notification requirements.
 
Does the WARN Act Apply in a Receivership?
 
One of the primary goals of most receivership proceedings is to move fast. After all, the longer a legal process such as a receivership proceeding takes, the more expensive it will be. A dragged out process may also negatively impact the value of receivership assets, leading to reduced creditor recoveries, and hamper the receiver's ability to sell the business as a going concern. Accordingly, speed is paramount.
 
The WARN Act, however, is meant to slow employers down, at least when it comes to layoffs associated with the wind-down of a business. So, does a receiver have to abide by the WARN Act?
 
There is little case law on this issue. While it's always hard to provide a definitive answer on an issue of statutory interpretation without clear court guidance, the short answer is: probably not.
 
At least that's been our experience. For example, in a receivership case pending in the United States District Court for the Northern District of Georgia involving the assets of Heritage Sportswear, Inc., we recently filed a motion on behalf of the receiver requesting that the court authorize the receiver to reduce the company's workforce without sending notice in accordance with the WARN Act. No objections were lodged and the court granted the motion.
 
While there's not much in the way of case law that's directly on-point, there is guidance that can be drawn from analogous court decisions-involving contexts slightly different than a traditional receivership- that suggest that receivers aren't obligated to provide WARN Act notice. The key distinction that these courts identify is that in the case of a receivership-like proceeding, an entity other than an "employer," such as a receiver, court, or the federal government, is ordering the layoffs and directing the wind-down. Therefore, because an "employer" is not in control, the WARN Act doesn't apply.
 
For example, in a situation involving a failed bank and a government takeover of the bank's assets, a court explained, "[W]hen the federal authorities take over the bank and shut it down, there is no employer to give notice. The former bank owners do not own the bank; nor did they close the bank. Moreover, the federal government is precisely not an employer if it is shutting the bank down." Office & Professional Employees Int'l Union Local 2 v. FDIC, 138 F.R.D. 325 (D.D.C. 1991).
 
Conclusion
 
A receivership can be an excellent tool for a secured lender to maximize the value of its secured collateral while holding down costs relative to a Chapter 11 bankruptcy proceeding. One of a receivership's primary advantages is that, unlike in many Chapter 11 cases involving a debtor-in-possession, the WARN Act doesn't apply when layoffs are required. Labor costs are significant in most receivership cases, and avoiding 60-days' notice in advance of a workforce reduction can have a meaningful impact on the funds ultimately available for distribution.
 
The Dragich Law Firm serves as legal counsel to receivers in cases throughout Michigan and across the country. To learn more about our receivership legal counsel services, please contact David Dragich at ddragich@dragichlaw.com . 
MEMBERS IN THE NEWS...
John Trendell II
Crestmark Appoints John Trendell II as Business Development Officer
 
TROY, Mich., (Nov. 20, 2019) - Crestmark is pleased to announce that John Trendell II has been named a business development officer where he has been serving as underwriting manager since 2014. John is based in Troy, Michigan and will report to James Farrell, senior vice president, sales manager.

Trendell joined Crestmark in May 2013 as a vice president in Crestmark's underwriting group. He was promoted to first vice president and underwriting manager in 2014. Previously, Trendell was the managing director for Great Lakes Business Credit; assistant vice president and relationship manager for LaSalle Business Credit; and a collateral analyst, auditor, and audit manager for Greenfield Commercial Credit.

"We are excited John has joined Crestmark's sales team," said Farrell. "He brings more than 18 years of industry experience to the role, and with his many contributions and proven success with Crestmark, he'll be a valuable addition to our talented team of business development officers."

"Having been an integral part of the bringing clients into Crestmark for over six years, this role will allow me to be more involved up front in helping businesses obtain the financing they need," said Trendell. "I'm looking forward to hitting the ground running -- and have already been talking to several businesses."

Trendell has a B.B.A. in finance from Walsh College.

JOIN US FOR OUR
ANNUAL HOLIDAY PARTY & 
CHARITY EVENT
DECEMBER 4, 2019
DETROIT GOLF CLUB



The Chapter is celebrating its 25th year and expanding its membership. 

TMA Detroit Members will receive a FREE registration if they bring 
a paying, non member guest!!

Enjoy the festive evening with hors d'oeuvres and cocktails while networking
with other TMA business professionals.

Our featured charity will be Crossroads of Michigan.

*Members who bring a non member full-price guest, are free.

Agenda
5:30pm - Networking and Cocktails
8:30pm - Evening concludes

Cost*
$20 Members | $85 Guests
Includes heavy hors' doeuvres and open bar

Location
Detroit Golf Club, 1750 Saxon Drive, Detroit


For more information and to register, go to the TMA Detroit website. 


Crossroads  is a social service outreach agency with two  locations  in Detroit. Founded in 1971, Crossroads exists to support the community at large by providing emergency assistance, advocacy, and counseling to anyone in need.
Acting in partnership with many other agencies, parishes, hospitals, companies and organizations in the metro area, Crossroads offers assistance in the form of a hand-up. We work with our clients to meet their immediate needs and help them assess their situations to lessen the likelihood of future problems. Our efforts are funded by foundations, individuals, and friends who are committed to bringing hope to those living on the edge of despair... Donations of time, talent, and resources are always welcome.
 
RECENT TMA DETROIT EVENTS...

RECEIVERSHIP INTERACTIVE PANEL & LUNCHEON
November 12, 2019
The Townsend Hotel
Birmingham, Michigan
 
 




CRAFT COCKTAIL EVENT
October 17, 2019
Art Novelty Company
Ferndale, Michigan

 



FALL KICK OFF & 
25TH ANNIVERSARY CELEBRATION
September 12, 2019
Birmingham Country Club
Birmingham, Michigan
 

Newsletter submissions
We are always looking for new content for our newsletter. Have an article you wrote? Received a promotion? Quoted in a newspaper or other publication? We want your information so we can help promote you, our member!

Please send us your submissions for our next newsletter  here.

   Upcoming Events
D ecember 4, 2019
Annual Holiday Party & Charity Event
Detroit Golf Club

January 15, 2020
Opportunities and Headwinds in the Auto Industry: Fast Changing Tech, Slowing Volumes and Trade Wars

Birmingham Country Club

February 5, 2020
next Gen @ Phoenix Suns vs Detroit Pistons
Little Caesars Arena
Detroit

April 20-21, 2020
MidAmerica Regional Conference
Westin Book Cadillac
Detroit

June 15, 2020
Annual Golf Outing
Wabeek Country Club
Bloomfield Township

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


2019-2020
BOARD OF DIRECTORS

Amanda Vintevoghel, President
The Dragich Law Firm PLLC

Sean Pattison, President-Elect
Plante Moran

Matt Dekutoski, Treasurer
Crestmark

Brendan Best, Immediate Past President
Varnum LLP

Allison Bach, Director
Dickinson Wright

Laura Eisele, Director
Laura J. Eisele PLC

Glenn Kushiner, Director
Conway MacKenzie

Chuck  Mouranie , Director
EDSI Solutions

Marc Swanson, Director
Miller Canfield Paddock & Stone
PLC

Ted Sylwestrzak, Director
Dickinson Wright

John Trendell, Director
Crestmark

Jason Weiner, Director
Schafer & Weiner PLLC


Ex-Officio Directors:

Eric Grozenski
nextGen President
Loeb Term Solutions
 
Katie Montague
NOW Chairperson
O'Keefe

GOLD SPONSORS
Thank you for your support!
  
Conway MacKenzie

   DW

     First Business

SILVER SPONSORS
Thank you for your support!
    
 



  



 



 


 




 

 






 

Newsletter 
Co-Chairpersons:

Laura Eisele
Glenn Kushiner

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TMA Detroit
Chapter Executive
Mary Anne LaMarre, CAE
(313) 910-5066