January/February 2014 | 1

TURNAROUND MANAGEMENT ASSOCIATION OHIO

Turnaround TimesVolume 1 | Issue 2 | March/April 2014

President’s ReportScott OpincarMcDonald Hopkins LLC

The Ohio Chapter of TMA, IWIRC, and the Tri-State Association for Corporate Renewal hosted a workout bankers’ panel in Columbus on April 10th. Approximately 115 people attended the event. It was a great opportunity to meet and network with restructuring professionals from across the state. I would like to recognize and thank Rob Folland and Rick Szekelyi for their efforts in planning the program.

On March 27th, members of our chapter gave a presentation to the Beta Alpha Psi fraternity at the Weatherhead School of Management at Case Western Reserve University. Special thanks to Mark Kutylowski for organizing the presentation.

As we finally say goodbye to the cold and snow, I hope that you will take advantage of our upcoming golf and networking events. The Great Lakes Regional Conference will be held at Quail Hollow Resort in Concord, Ohio on May 29th and 30th. A golf outing will be held on May 29th, followed by a dinner and networking reception. An educational seminar will be held the next morning. Greg Harris, president and CEO of the Rock & Roll Hall of Fame, is our featured speaker. Our annual joint event with ACG will be held at the Shoreby Club on June 10th. The Ohio TMA golf outing is on Monday, July 14th at Mayfield Country Club.

Our chapter is also sponsoring the 2014 William J. O’Neill Great Lakes Regional Bankruptcy Institute, which will be held on May 20th and 21st at the Global Center for Health Innovation in Cleveland. TMA non-attorney members are invited to register at the member rate for the Cleveland Metropolitan Bar Association. You can do so at: www.clemetrobar.org/CLE/ONeill.

Remember that the success of our chapter is dependent upon your participation and attendance at the events. I look forward to seeing you soon.

TMA is the premier national organization

of professionalsdedicated to

corporate renewaland turnaround management.

March/April2014

In This Issue

Page 2The Bleeding-Breathing

Analysis: Which to Address First?

Page 4Scenes from our

April event

Page 42014 Schedule

As we finally say goodbye to the cold and snow, I hope that

you will take advantage of our upcoming

golf and networking

events. About TMA

Visit our website:www.turnaround.org

Follow us on Twitter:

@OhioTMA

2 | Turnaround Times

In 1996, the Special Operations Command (the American unified command for the spe-cial forces of the Army, Air Force, Navy and the Marine Corps) created Tactical Combat Casualty Care. This has become the standard of care for the tactical management of combat casualties within the Department of Defense. It is the sole standard of care endorsed by both the American College of Surgeons and the National Association of EMTs for casualty management in tactical environments.

So you may be asking what does any of this have to do with turnaround management and crisis intervention? I’m getting to that.

Traditionally, the TCCC had set the priorities of combat care on the battlefield as: First: tend to those who are experiencing problems with breathing Second: address cases of severe bleeding

Based on recent information gathered from Tactical Combat Casualty Care in both Iraq and Afghanistan, new priorities were established, reversing the old order. Now, those with severe bleeding from a penetrating trauma, such as a stab wound or a bullet, are tended to first, since these injuries can cause death in one to three minutes. Then, those with breathing issues are tended to, since it’s been discovered that that can cause death in four to five minutes.

What It Means for UsAs a turnaround practitioner, the responsibility is first to identify the issues facing the com-pany that can result in severe consequences leading ultimately to the failure, or “death,” of the company in crisis. Some of the traditional issues include: Inadequate management or staff Lack of adequate sales Untimely collection of receivables Cost of goods sold unreasonably high Excessive sales, general and administrative expense Inadequate working line of credit Inadequate machinery Inadequate or lack of timely information Employee theft Lack of demand for product

The Bleeding-Breathing Analysis: Which to Address First?By Bob Cohen, Centrus Group

Centrus Group, Inc., is a Northeast Ohio-based turnaround management and crisis intervention firm that focuses on maximizing the value of businesses. It has served clients with creative, beyond-the-obvious solutions for more than 20 years.

Feature Story

This Month’s Featured Sponsor

Ohio TMA Officers

President Scott Opincar

Vice President Sally Barton

Secretary Mark Kozel

Treasurer Mark Kutylowski

Past President John Lane

Ohio TMA Board Members:

Kelly Burgan

Daniel DeMarco

Bryan Farkas

Rob Folland

Dov Frankel

Suzanne Koch

John Lalley

Mark Seryak

Rob Stefancin

Jerry Stethem

Rick Szekelyi

David Wehrle

Chapter Administrator Louise Walsh

January/February 2014 | 3

It is not enough for the turnaround practitioner to merely identify those significant issues facing the company in crisis. Instead, the true artistry of a turnaround professional is to clearly understand, identify, and set a priority to first address those issues that will cause the company to fail, and then take action consistent with that priority.

Consider these familiar situations in a typical company in crisis: The sales department can sell products that engineering has not yet developed. Engineering can develop products that the sales department cannot sell. The marketing department always seems to need a larger budget to promote the product line and the company brand. The accounting depart-ment always needs a larger computer system to address the administrative reporting capa-bilities of the company. The maintenance department always needs more tools and spare parts. Manufacturing always needs more people for the factory. And the lender always wants to get repaid.

Meanwhile, the president of the company is trying to figure out how to make payroll on Friday, and today is Wednesday. This is an easy one: we address the payroll first, just as we would address bleeding before breathing in the field of combat. But most of the time the most appropriate priority is not as obvious.

Think Before ReactingKnee-jerk reactions based upon previous experience may not be the most appropriate course of action. Some of the classic actions that are implemented without consideration to the “bleeding-breathing” analysis include: Make it up in volume, without consideration that the more the company sells the more

they lose, because their cost of sales exceeds the sales price Get the bank to lend us more money, even though the bank has already provided loans to

the company beyond reasonable levels Just cut overhead, even though that overhead is needed to maintain production and to

bring the product to market

If setting the appropriate priorities is so simple, why did the Department of Defense contin-uously gather information and reassess its approach, resulting in the reversal of the priority of first breathing to first bleeding?

We take back three lessons from Tactical Combat Casualty Care to apply in turnaround management and crisis intervention situations. The first lesson is to clearly identify those critical issues facing the company, with the understanding that the company can “die” from any of these critical issues. Secondly, have a thorough-enough understanding of those critical issues to address the issues the company will die from first. And lastly, understand that over time, what was once perceived as the most critical issue can change. Constant monitoring of the critical issues must be maintained to be certain that the most critical issue is addressed on a day-by-day basis.

Just remember - effective prioritization - BLEEDING, BREATHING.

Bob Cohen is the President of The Centrus Group, Inc. He can be reached at bcohen@centrusgroup.com.

Ohio TMA Corporate Sponsors

Baker & Hostetler LLP

Barnes & Thornburg LLP

Brouse McDowell

Calfee Halter & Griswold LLP

Centrus Group, Inc.

Chikol Equities, Inc.

First Business Capital Corp.

Ice Miller LLP

Inglewood Associates LLC

McDonald Hopkins LLC

Phoenix Management Services

Taft Stettinius & Hollister LLP

4 | Turnaround Times

May 29-30 Quail Hollow Resort, Concord, Ohio “Great Lakes Regional Conference” Greg Harris, President and CEO of the Rock & Roll Hall of Fame & Museum, will speak on “The Challenge of Revitalization.” Other programs/speakers to be announced.

June 10 Shoreby Club; Evening Event “Annual Joint ACG/TMA event” One of the most popular events of the year on the shores of Lake Erie. Join us to revisit current contacts and meet new ones.

July 14 Mayfield Country Club “Annual Golf Classic.”Sept. 18 Center for Health & Innovation (Medical

Mart), Breakfast meeting “Affordable Care Act – One Year Later – How Businesses have been Affected” We’ve all heard the hype – the projections of doom & gloom and problematic web sites. Hear how business has really been affected at a great new setting.

Oct. 23 Time and Location to be determined “The Changing Landscape of Turnarounds – Exploration of Oil & Gas Industry.” Where are the turnarounds – and what do we need to know to work in these spaces.

Nov. 20 CMBA facility. Time TBD “Annual Educational Event” Learning + CLE credit + great topics = you won’t want to miss it.

Dec. 11 Great Lakes Brewing Company; evening event “Annual Holiday Party” A classic event held, this year, at the home of Great Lakes Christmas Ale.

*Event dates and locations are subject to change

2014 Schedule

Scenes from our April event

Thanks to the speakers and sponsors of TMA’s annual workout banker panel in Columbus. In photo at left, speakers included (from left to right): Glenn Bartley, First Merit Bank; Michael Christie, US Bank; Victoria Powers, Ice Miller; Scott Unkraut, Fifth Third. Thanks also to our event sponsors (photo at right), who included: Robert Stefancin, Ice Miller; Richard Szekelyi, Phoenix Management Services; Robert Folland, Barnes & Thornburg.