PracticeAccounting FirmsInsolvency practitioners: the new masters of the universe

Insolvency practitioners: the new masters of the universe

Insolvency practitioners are being thrust into the limelight by the financial crisis

PwC's Tony Lomas

Experience: PwC’s Tony Lomas

Insolvency is one of those disciplines that firms don’t like to brag about,
for very good reason. Making money out of other people’s misery has a stigma
attached to it ­ which is why there are very few awards ceremonies for the
service line.

Call it what you like: restructuring, rescue, renewal, business recovery,
strategic review, reorganisation services it all boils down to the same thing: a
company is in trouble and somebody has got to come in and sort it out.

So who are the main characters that tread the boards when financial tragedy
hits? They are more used to beavering away behind the scenes in relative
anonymity, but the economic upheaval has thrust them into the spotlight.

Tony Lomas chairman of restructuring at PricewaterhouseCoopers is currently
trying to unravel the complexities of Lehman Bros’transactions, and despite
being officially named as a joint administrator, he is the person in charge of
the daunting task.

Lomas is preparing for a showdown with the creditors at what is expected to
be a highly-charged meeting next week, but his past experiences, which include
the administration of Enron in Europe, will stand him in good stead.

The state of the financial markets has brought others into the public eye.
Andrew Caldwell of BDO Stoy Hayward is handling the Northern Rock valuation at
the moment. The government has
put £4.5m in the pot for him to come up with a price for the ailing bank.

But Caldwell’s work is already looking fraught, with former shareholders
looking to redefine the terms of his job.

Ernst & Young’s restructuring expert Alan Bloom is a government favourite
because of his infrastructure pedigree and he is usually the person in the frame
when E&Y wins a big administration.

But strangely enough, with all the volatility in the financial markets, Bloom
hasn’t landed a big job, at least a big public job.

This may be because of conflicts of interest due to E&Y existing
contracts, but it may come as a surprise that Bloom’s name has not hit the
headlines in some respect.

Bloom has traditionally been associated with big ticket infrastructure
collapses, but also did the Barings administration too.

Other major collapses are expected to follow as the trouble in the financial
markets continues to diffuse into the wider economy, affecting property
companies, and retailers and the leisure industry. Firms have made moves to
cater for a spike in activity.

Smith & Williamson brought in Barry Knight earlier this year. The IP has
over 18 years’ experience in the retail sector, having worked with Mytravel,
Littlewoods, Burtons (now Arcadia), Sears, Selfridges, Coats Viyella, Jaeger and
Boots and he could also become a household name in the near future if a high
street giant gets into trou

Bank bailouts

We know that there are accountants advising the government on its banking
bailout plan.

The Treasury has so far kept the name of the firm or firms helping out under
wraps, but with a job of such vital importance the government will have wanted
to get the best restructuring advice available.

The company set up to monitor the government’s investment in the banks is
also likely to need ongoing advice and support.

Which firm will pick up the possibly lucrative contract?ble.

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