Education Lenders 2007 Annual Report Credit Economy Distressed Downturn Liquidity Certification Webinars Investors
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281175_tma 7/3/08 1:35 PM Page 2 Distressed Downturn Liquidity SolutionsCertification........... Hedge funds Education Lenders 2007 Annual Report Credit Economy Distressed Downturn Liquidity Certification Webinars Investors ..........Debt Membership Lenders Issues Focused Credit Economy Distressed Member Centered Downturn Education Globally Engaged ...........Hedge funds Debt Certification Opportunity Investors Conferences agility Credit Education Downturn Distressed........... Liquidity SolutionsCertification Hedge funds Opportunity ...........Investors Debt Strategic Economy Credit Conferences 281175_tma 7/3/08 1:35 PM Page 3 Conferences Credit Economy Distressed Downturn Contents Liquidity Solutions Business Highlights 2007..............2 Hedge funds International Chapters..............4 Education Lenders Credit North American Chapters..............8 Distressed Downturn Liquidity Certification Communications..............22 Investors Membership..............23 Debt Opportunity Lenders Credit Cornerstone..............24 Economy Distressed Downturn Education..............28 Education Hedge funds Annual Convention..............30 Debt Certification Opportunity Awards..............27, 32-33 Investors Conferences Credit Moving Forward..............34 Economy Education Downturn Financial Report..............36 Liquidity SolutionsCertification Hedge funds 2007 TMA International Board of Directors..............37 Opportunity Investors Debt Strategic 281175_tma 7/3/08 1:35 PM Page 4 The dynamic restructuring market tested the Turnaround Management Association’s ability to stay ahead of the curve during 2007. Rising oil prices, a sudden mid-year credit crunch, and a plummeting real estate market put the “R” word on the tip of everyone’s tongue. An up-cycle for the corporate renewal industry seemed on its way. But what form would it take? A major shift in the restructuring world made vigilance and agility the watchwords of the year. 1 281175_tma 7/3/08 1:35 PM Page 5 Brazil Weak U.S. Dollar Chapters Easter Europe China Business Highlights HongLicensing Kong Emerging Markets Educational ...........Growth Debt Certification Opportunity 2007 Brazil Weak U.S. Dollar Expansion InternationalChapters Easter Europe China Hong Kong EmergingLicensing Markets Educational Growth .......Investors Russia India Top 10 U.S. Business Stories of 2007 ........... Selected by msnbc.com 1. Mortgage defaults rise in the U.S. and home prices fall, triggering Debt chaos in commercial paper markets and a credit crisis that reverberates Certification around the globe. Opportunity 2. Toy recalls cause potential backlash against “Made in China” products. Brazil 3. Crude oil prices march closer to $100 a barrel, keeping gasoline pump Weak U.S. Dollar prices high. 4. Apple Inc.’s profits and share price soar with launch of iPhone and updated iPod players. Expansion 5. The Fed cuts borrowing rate twice in the second half of the year to International keep the economy from falling into a recession. Chapters 6. Dow Jones Industrial Average tops 14,000 for first time, then pulls Easter Europe...........back as credit crisis intensifies. 7. U.S. dollar falls to record lows against the euro. 8. Media consolidation with Rupert Murdoch buying Dow Jones, parent China of the Wall Street Journal; Sam Zell acquiring Tribune Co.; Thomson Corp. Hong Kong taking over Reuters. Licensing 9. Ousters of Merrill Lynch CEO Stan O’Neal and Citigroup CEO Emerging Markets Charles Prince. Educational 10. Food recalls as e-coli and other health risks found in hamburger meat. Growth ........Investors Russia India 2 281175_tma 7/3/08 1:35 PM Page 6 Corporate Renewal 2007 “Every morning in Africa, a gazelle wakes up. It knows it must run Subprime knock down faster than the fastest lion or it will be killed. Every morning a lion During 2007, many of the financial services firms were hammered from wakes up. It knows it must outrun the slowest gazelle or it will mortgage-related losses, with double- starve to death. It doesn’t matter whether you are a lion or a digit declines and a cumulative market value drop of $319.8 billion. gazelle. When the sun comes up, you better start running.” Percentage of decline from their From The World Is Flat by Thomas Friedman 2007 peak to the second week in January 2008 Two thousand and seven began with no skip in the beat of an economic E-Trade Financial Corp. -89% cycle still riding high. The stock market was up. Growth was above-par. Deal Countrywide Financial Corp -86% flow moved at a swift and steady pace propelled by abundant credit and Washington Mutual Inc. -69% widening influence of international players. Mergers and acquisitions hit a Bear Stearns Cos -58% Merrill Lynch & Co. -49% record. Corporate debt remained seemingly default-proof. Profits boomed. Citigroup Inc. -49% Morgan Stanley -47% Bankruptcy Abuse Prevention and Lehman Brothers Holding Inc. -33% Then it happened. Source: Chicago Tribune, January 12, 2008 Consumer Protection Act (BAPCPA), pro- Halfway into the year, the subprime fessionals adjusted to the new norm of At least 20 mortgage lenders mortgage lending market caved, and all out-of-court restructurings. Through the have declared bankruptcy since those complex securities packages backed December 2006. US foreclosures easy credit years, firms diversified their by assets that included mortgages no set a third-quarter record. services to build a broader client base. Source: Bloomberg longer were airtight. The housing market’s deep funk spread as mortgage Trickle-down: The crisis in the Within TMA, membership grew as defaults spiked, home values plummeted, housing market has caused pain and chapters made new alliances with other suffering to secondary industries: fur- and foreclosures spread. Even old guard niture, home furnishings, housing professionals, successfully communicated investment houses could not disentangle products, lumber companies. the breadth of their skills, and estab- Household names like Bombay Co., themselves from the mess, and chiefs at lished new outposts around the globe. Levitz Furniture, and Sofa Express Merrill Lynch & Co. and Citigroup, Inc., have filed for bankruptcy. Whatever looms in 2008, the very nature were shown the door. of turnaround professionals suggests they will be ready. The year came to an end with lackluster holiday sales, oil prices near all-time JUNE 2007 TREND WATCH This 2007 TMA Annual Report highlights highs, rising unemployment, and fear POLL FORETELLS CRASH the accomplishments of turnaround pro- that a tottering economy was headed PROJECTED INCREASE IN fessionals who have devoted their ener- toward recession. DEBT DEFAULTS gies to building an international professional community dedicated to Other Indeed, six out of 10 respondents in the 4% corporate renewal and turnaround man- 2009 or later Turnaround Management Association's 13% Last half of 2007 agement. As it approaches its 20th 20% annual Trend Watch poll on the state of anniversary year in 2008, the TMA is the turnaround industry reported now more than 8,000 members strong inquiries, engagements, and revenues Last half of 2008 and continues to advance its mission: 23% had increased at least 10 percent in the 1st half of 2008 “To serve the needs of participants from 40% past 12 months. Seventy percent report- all disciplines by building awareness of ed an uptick in inquiries from banks and the corporate renewal industry, promot- TMA respondents to a June 2007 Trend lenders, up from 57 percent in 2006, Watch poll nailed it. Sixty percent said ing high standards of practice, fostering evidence of the widening impact of the by mid-2008, there would be a signifi- the professional development of and cant increase in debt defaults. credit crunch. enhancing the image of TMA members.” Turnaround professionals demonstrated their nimbleness in the face of economic vagaries, employing the skills they use every day to manage crises on the job. Following the 2005 passage of the 3 281175_tma 7/3/08 1:35 PM Page 7 Brazil Weak U.S. Dollar Chapters Easter Europe China HongLicensing Kong Emerging Markets Educational ...........Growth Debt Certification Opportunity Brazil Weak U.S. Dollar International Chapters ........... Easter Europe China Hong Kong EmergingLicensing Markets Educational Growth .......Investors Russia India ........... Globally Debt Certification Opportunity Brazil Weak U.S. Dollar International Engaged Expansion Top European Business Headlines of 2007 Chapters Source: Business Week. Easter Europe 1. Credit Crisis 2. The A380 Flies in a Tough Year for Airbus China 3. The iPhone Lands—and Europe Responds Hong Kong 4. The Troubles at Alcatel-Lucent 5. The Demise of DaimlerChrysler Licensing 6. Changing of the Guard at Siemens Emerging Markets 7. Energy—and Alternatives 8. High-Tech Antitrust Educational 9. Climate Change and Carbon Awareness Growth ........Investors Russia India 4 281175_tma 7/22/08 2:10 PM Page 8 International Chapters Across the globe, the business of turnaround and corporate restructuring “Astute and well- gained credibility in 2007. positioned players [can] assist companies…that A groundbreaking Enterprise Bankruptcy Law of China applying to a broad lose their swath of insolvent entities took effect. Distressed investors flocked to Europe in search of new vistas as the greenback withered and the U.S. subprime footing as mortgage crisis grew. Emerging markets in Brazil and elsewhere hummed. the world flattens. The Even the sturdiest global markets began to see signs of trouble as the year separation wore on